liiif 


Si  ii' 


HD 
2745 
G95   Gushing 


Votin.f^  trusts 


Southern  Branch 
of  the 

University  of  California 


Los  Angeles 


Form  L-1 

"HO 


This  book  is  DUE  on  last  date  stamped  below 


MAY  1  '^  m^^' 


APR  251927 


yJAH  8 
MAR  2  5 

Af^^  8      1980 
OCT  2  4  1934 


VOTING   TRUSTS 


THE  MACMILLAN  COMPANY 

HEW  YORK   ■  BOSTON  •   CHICAGO   •  DALLAS 
ATLANTA    •    SAN   FRANCISCO 

MACMILLAN  &  CO..  Limited 

LONDON   •   BOMBAY   •  CALCUTTA 
MELBOURNE 

THE  MACMH-LAN  CO.  OF  CANADA.  Ltd. 

TORONTO 


VOTING  TEUSTS 


A  CHAPTER  IN   RECENT  CORPORATE 
HISTORY 


BY 
HARRY  A.  GUSHING 

OF  THE  NEW  YORK   BAR 


47fiS0 

THE  MACMILLAN  COMPANY 
1916 

All  rights  resentd 


COPTKIGHT,    1915 

By  the  MACMILLAN  COMPANY 
Set  up  and  electrotyped.    Published  September,  1915= 
Reprinted  March.   1916 


\ 
V 


^ 


CONTENTS 

PAGE 

"^      I.  The  Significance  of  Voting  Trusts 1 

II,  The  Contents  of  Voting  Trusts 36 

III.  The  Law  of  Voting  Trusts 100 

IV.  Forms  Relating  to  Voting  Trusts 135 

Index ^^^ 


VOTING   TRUSTS 


THE  SIGNIFICANCE  OF  VOTING  TRUSTS 

The  history  of  American  corporations  may  be  roughly 
divided  into  an  early  period,  in  which  corporate  organi- 
zation appeared  chiefly  in  the  development  of  banks  and 
insurance  companies,  the  later  period  of  railroad  ex- 
pansion, and  the  modern  period  of  the  general  applica- 
tion of  corporate  forms  to  mercantile  enterprises.  If  a 
bank  ceased  to  be  solvent,  holding  only  the  assets 
usually  acquired  by  such  concerns  and  with  no  plant 
or  real  estate  investment  to  be  gradually  developed, 
the  natural  result  was  the  prompt  winding  up  of  the 
business,  without  any  attempt  at  reorganization.  When, 
on  the  other  hand,  the  rapid  expansion  of  railroads 
under  ill-considered  financial  policies  led  to  or  threatened 
disaster,  there  existed  the  road  itself  which  could  not 
be  abandoned  and  the  saving  of  which  required  the 
concerted  action  of  either  the  former  owners  or  new 
investors  or  of  both.  Likewise,  with  many  of  the 
large  mercantile  corporations  more  recently  established, 
financial  embarrassment  could  not  properly  be  met,  by 
those  interested,  merely  by  writing  off  an  investment, 
for  the  same  reason  that  there  usually  existed  a  property 
or  business  of  some  intrinsic  value  which  ought  not 
to  be  sacrificed,  and  which  might  under  proper  condi- 


2  THE  SIGNIFICANCE  OF 

tions  be  managed  with  some  probability  of  ultimate 
success.  Naturally  thus  the  history  of  corporate  devel- 
opment in  the  last  forty  years  has  been  marked  by  the 
introduction  and  refinement  of  the  reorganization  agree- 
ment or  readjustment  agreement.  Usually  as  an  in- 
cident or  as  a  result  of  these,  and  after  experience  show- 
ing the  ineffectiveness  of  pooling  agreements  and 
deposit  agreements  in  meeting  the  needs  of  the  case, 
there  gradually  came  into  use  the  voting  trust  agree- 
ment. 

In  its  early  form  the  typical  voting  trust  agreement 
evidenced  little  more  than  the  stockholders'  transfer 
of  their  certificates  absolutely  to  trustees,  or  in  some 
instances  to  a  trust  company,  and  the  undertaking  on 
the  part  of  the  trustees  to  deliver  stock  certificates  on 
the  expiration  of  the  trust  and  in  the  meantime  to 
distribute  to  the  holders  of  trust  certificates  the  amount 
of  any  dividends  paid  upon  the  stock.  The  powers 
of  the  trustees  were,  for  the  time  being,  those  of  owners 
of  the  stock,  and  the  absence  of  restrictions  indicates 
the  complete  dependence  then  placed  on  the  trustees, 
both  to  meet  any  unforeseen  contingencies  and  to  take 
all  steps  which  might  seem  to  them  appropriate.  The 
development  from  the  occasional  use  of  this  simple 
arrangement  has  been  marked,  however,  both  by  a 
great  variety  of  detailed  provisions  and  by  the  applica- 
tion of  such  trusts  to  many  concerns  of  substantial 
importance. 

A  discussion  of  voting  trusts,  in  a  period  when  not 
only  concentration  of  property  but  even  combinations 


VOTING  TRUSTS  3 

of  mere  influence  have  been  subjected  to  severe  criti- 
cism, naturally  suggests  a  justification  of  what  some  still 
regard  as  an  innovation  of  slight  utility  and  of  doubt- 
ful propriety.  Such,  however,  is  hardly  more  appro- 
priate than  a  defense  of  corporate  organization  itself. 
Like  every  other  detail  or  process  in  corporate  affairs 
the  voting  trust  may  have  been  subject  to  such  misuse 
as  is  inevitable  when  dependence  is  placed  on  the  per- 
sonal equation;  but,  on  the  other  hand,  while  the  object 
of  some  adverse  comment,  it  has  been  much  less  harmful 
and  much  more  productive  of  desirable  results  than 
most  features  of  modern  corporate  development.  It 
has  not  ordinarily  been  in  itself  a  means  of  undue 
concentration,  and  not  often  has  it  been  justly  deemed 
even  evidence  of  a  purpose  to  bring  about  such  a  con- 
dition. Spoken  of  judicially  as  a  "comparatively  modern 
and  useful  device  in  corporate  management"  {New  York 
Law  Journal,  January  19, 1914),  the  voting  trust  has  come 
to  be  recognized  both  by  conservative  bankers  and  by 
investors  as  a  desirable  and  effective  adjunct  of  modern 
finance  whose  invention,  and  whose  apphcation  to 
difficult  situations,  have  been  amply  justified. 

The  significance  of  the  voting  trust  in  the  modern 
history  of  corporations,  from  both  the  legal  and  the 
economic  standpoints,  is  sufficiently  indicated  by  the 
fact  that  stocks  of  such  railroad  systems  as  the  Erie, 
Reading,  Baltimore  and  Ohio,  Chesapeake  and  Ohio, 
Seaboard  Air  Line,  and  Northern  Pacific  have  earlier 
been  thus  controlled,  and  by  the  facts  also  that  this 
form  of  control  is  now  in  force  in  the  affairs  of  many 


4  THE  SIGNIFICANCE  OF 

mercantile  as  well  as  transportation  corporations,  in- 
cluding local  traction  systems  in  New  York,  Chicago 
and  Philadelphia,  and  has  only  recently  been  discon- 
tinued in  the  cases  of  the  International  Mercantile 
Marine  Company  and  the  Chicago  Great  Western  and 
Southern  railways.  Indeed,  no  other  detail  of  corporate 
organization  is  so  peculiarly  the  result  of  recent  ex- 
perience or  more  distinctive  of  the  modern  theory  and 
practice  in  the  correct  and  satisfactory  reconstruction 
of  corporate  business. 

This  method  of  temporary  control  was  not  infrequent 
even  in  the  decade  of  the  seventies,  as  was  natural  at  a 
time  when  scores  of  issues  of  railroad  securities  were 
in  default.  Thus,  in  1875  the  principal  stockholders 
gave  up  control  of  the  St.  Louis,  Iron  Mountain  and 
Southern  by  transferring  a  large  block  of  stock  to  Bar- 
ing Brothers  and  Co.  in  trust,  with  power  to  retain  the 
same  for  voting  purposes  until  six  months  after  the  full 
resumption  of  interest  payments.  The  earlier  sugges- 
tion to  lodge  this  stock  with  a  committee  was  superseded 
by  Mr.  Marquand's  offer  to  make  the  assignment  to 
the  banking  firm,  as  he  did  ''not  see  how  any  committee 
could  be  named  that  would  so  fully  represent  the  bond- 
holders' interest,  and  in  which  all  parties  would  feel 
such  implicit  confidence  as  in  Messrs.  Baring  Brothers 
and  Co."  Three  years  later,  the  holders  of  eighty-five 
per  cent,  of  the  company's  bonds  having  agreed  to  the 
funding  of  arrears  of  interest  on  certain  conditions,  the 
holders  of  more  than  eighty  per  cent,  of  the  stock  acceded 
to  the  arrangement,  and  under  the  agreement  of  No- 


VOTING  TRUSTS  5 

vember  27,  1878,  transferred  their  stock  to  Robert  Lenox 
Kennedy  and  four  other  trustees,  who  were  to  vote  it 
until  one  year  after  the  period,  subsequent  to  March  1, 
1880,  when  the  company  should  have  paid  the  full  interest 
on  both  classes  of  its  income  bonds.  In  March,  1880, 
the  trustees  gave  notice  of  the  termination  of  the  trust, 
pursuant  to  one  of  its  provisions,  upon  the  request  of 
the  holders  of  the  income  bonds,  the  effect  of  which 
was,  as  stated  at  the  time,  'Ho  put  the  shareholders 
again  into  full  possession  of  the  company,  and  enable 
them  to  do  many  things  considered  to  be  of  advantage 
to  the  company,  which  the  trustees,  who  were  bound 
by  the  rigid  terms  of  their  trust,  have  not  felt  at  liberty 
to  do.  In  the  general  recovery  of  railroads  from  the 
prostration  of  1873  there  has  been  no  company  which 
has  improved  more  rapidly  than  the  Iron  Mountain 
and  none  whose  improvement  has  been  more  due  to 
legitimate  and  solid  considerations"  (New  York  Evening 
Post,  March  3,  1880).  In  1875  it  was  likewise  proposed 
to  transfer  the  stock  control  of  the  European  and  North 
American  (now  a  part  of  the  Maine  Central)  for  a  limited 
period  to  the  holders  of  the  concern's  floating  debt,  al- 
though the  actual  operation  of  the  road  for  four  years 
thereafter  was  in  the  hands  of  Hannibal  Hamlin  and 
WilHam  B.  Hayford,  trustees  under  one  of  the  company's 
mortgages. 

In  January,  1880,  some  four-fifths  of  the  common 
stock  of  the  Atlantic  and  Pacific  was  transferred  to 
John  A.  Stewart  and  two  associates  as  voting  trustees 
in  order  to  insure  a  continuance  of  joint  control  by  the 


6  THE  SIGNIFICANCE  OF 

Atchison  and  the  Frisco.  As  new  issues  were  made,  they 
were  offered  in  equal  shares  to  the  stockholders  of  the 
two  controlling  companies,  effecting  a  too  close  control, 
so  that  of  the  issue  announced  in  January,  1882,  one- 
third  was  released  to  bankers  for  the  avowed  object 
of  making  a  foreign  as  well  as  a  domestic  market  for 
the  stock.  The  joint  control  was  later  extended  so  as 
to  continue  possibly  until  1937,  but  in  the  meantime 
adverse  conditions  produced  a  rearrangement  of  the  re- 
lations existing  among  the  companies  concerned.  As 
early  as  1872  the  common  stock  of  the  St.  Louis,  Kansas 
City  and  Northern  had  been  placed  in  the  hands  of  four 
trustees  "for  the  purpose  of  enabling  said  trustees  to 
enforce  the  provisions  of  a  contract  relating  to  the  inter- 
change of  traffic,  which  has  been  entered  into,  by  and 
between  the  Pennsylvania  Company,  the  Chicago,  Alton 
and  St.  Louis  Company,  the  Kansas  Pacific  Railway 
Company,  and  this  Company;"  and  still  earlier,  in 
1864,  a  voting  trust  in  the  Pacific  Mail  Steamship  Com- 
pany, under  which  a  substantial  portion  of  the  stock  was 
held  by  Brown  Brothers  and  Co.,  had  occasioned  liti- 
gation in  which  the  trust  was  sustained  {Brown  v.  Pacific 
Mail  S.  S.  Co.,  5  Blatch.  525;  1867). 

The  stock  of  the  Pittsburg  and  Lake  Erie  Railroad 
was  in  October,  1877,  placed  under  a  trust  perpetual 
in  terms,  which  ten  years  later  was  overthrown  by  Cor- 
nelius Vanderbilt  (Vanderhilt  v.  Bennett,  2  Rlwy.  &  Corp. 
L.  J.  409).  The  reorganization  of  the  Mobile  and  Ohio 
in  1876,  completed  in  1879,  provided  that  voting  power 
on  the  stock  should  be  vested  in  the  Farmers'  Loan  and 


VOTING  TRUSTS  7 

Trust  Company,  as  trustee  of  the  general  mortgage, 
for  the  benefit  of  the  debenture  holders  until  the  pay- 
ment of  the  debentures,  an  arrangement  which  thirteen 
years  later  was  unsuccessfully  attacked  {Mobile  and 
Ohio  Ry.  Co.  v.  Nicholas,  98  Ala.  92;  1892),  and  which 
now  is  on  a  substantially  different  basis,  as  the  Southern 
Railway  (pursuant  to  the  policy  indicated  in  its  offer 
of  January  31,  1901)  has  secured  a  large  majority  both 
of  the  general  bonds  and  of  the  old  trust  certificates, 
issuing  against  the  latter  its  own  trust  certificates  bear- 
ing four  per  cent,  in  perpetuity.  The  voting  trust  of 
the  Texas  and  Pacific  Railway  expired,  and  that  of  the 
Midland  Railroad  of  New  Jersey  was  created,  in  1880; 
and  in  1882,  when  the  proposed  Mutual  Union  Telegraph 
trust  was  the  subject  of  discussion,  there  was  also  executed 
the  Standard  Oil  trust  agreement,  which  was  formally 
dissolved  by  the  certificate  holders  in  1892.  There- 
after, voting  trusts  increased  in  number  and  importance 
until,  as  often  happens,  their  frequent  use  led  to  their 
application  to  situations  in  which  no  such  arrangement 
was  really  necessary. 

The  Erie,  under  its  various  corporate  names,  was 
perhaps  the  system  most  productive  of  voting  trusts 
as  of  other  unique  features  in  corporate  history.  The 
plan  of  reconstruction  of  the  Erie  Railway,  December  14, 
1877,  provided  for  placing  with  three  trustees  represent- 
ing the  bondholders,  one-half  of  the  stock  of  each  class 
of  the  new  company  (the  New  York,  Lake  Erie  and 
Western)  until  the  full  dividend  of  six  per  cent,  should 
have  been  paid  on  the  preferred  stock  for  three  consecu- 


8  THE  SIGNIFICANCE  OF 

tive  years.  Under  this  trust  the  EngUsh  trustees  yearly- 
elected  the  company's  board,  and  when  the  road's  man- 
agement was  subjected  to  criticism  in  1884,  and  when 
there  was  a  "general  discussion  of  the  efficiency  and 
satisfactoriness  of  voting  trusts,  which  in  some  quarters 
are  recommended  as  a  panacea  for  the  ills  the  English 
investors  have  experienced  in  the  past,"  the  English 
holders  named  as  an  investigating  committee  two  of  the 
three  voting  trustees,  a  coincidence  which  lessened  the 
effect  of  the  committee's  comments.  Some  of  the  stock 
of  the  Atlantic  and  Great  Western  had  been  held  in 
trust  as  early  as  1868  (the  year  the  road  was  leased  to 
the  Erie),  and  when  this  company  was  reorganized  in 
1880,  as  the  New  York,  Pennsylvania  and  Ohio,  all  the 
stock  was  vested  in  five  voting  trustees,  elected  by  cer- 
tain classes  of  bondholders  other  than  the  ''thirds,"  to 
be  held  until  the  third  mortgage  bonds  (which  were 
really  fourths)  should  have  received  seven  per  cent. 
for  three  years.  Under  this  plan  also  the  voting  trustees 
represented  EngHsh  investors.  The  management  was 
not,  and  could  not  have  been,  successful;  and  "this  old 
waterlogged  piece  of  property,  with  its  mountain  of 
securities  and  unfortunate  history  and  experiences," 
became  a  part  of  the  Erie  system  in  the  reorganization 
of  1895,  representing  about  $40,000,000,  largely  stock, 
and  about  $20,000,000  undisturbed  securities,  in  the 
reorganization,  as  against  pre-existing  issues  of  nearly 
$170,000,000,  largely  bonds.  Of  the  Chicago  and  At- 
lantic stock  ninety  per  cent,  had  been  delivered  to  Presi- 
dent Jewett  of  the  Erie,  as  trustee,  to  be  held  until  the 


VOTING  TRUSTS  9 

payment  of  the  company's  first  mortgage  bonds  and 
the  repayment  to  the  Erie  of  its  advances  for  this  western 
extension,  a  trust  which  led  to  htigation  because  of 
Jewett's  futile  attempt  to  retain  control  of  the  stock  after 
ceasing  to  be  president  of  the  Erie,  the  court  holding 
that  the  ''facts  abundantly  show  that"  Jewett  ''was 
made  trustee  to  hold  the  stock  of  the  Chicago  &  Atlantic 
Company,  with  authority  to  vote  it,  because  he  was 
president  of  the  Erie  Company,  and  could  be  relied  upon 
to  control  and  manage  the  Chicago  &  Atlantic  road 
as  the  western  extension  of  the  Erie  line.  If  the  Erie 
Company  was  expected  to  advance  money  to  complete 
the  construction  of  the  new  road,  and  to  pay  interest 
on  the  bonds,  and  thus  take  care  of  the  credit  of  the 
Chicago  &  Atlantic  Company,  it  was  not  unreasonable 
it  should,  in  some  way,  be  protected  against  unfriendly 
management  of  the  new  road"  (Farmers^  Loan  and  Trust 
Co.  V.  Chicago  and  Atlantic  Ry.  Co.,  27  Fed.  146;  1886). 
The  same  period  witnessed  the  attempt  of  the  Erie, 
following  the  pool  of  1882,  to  control  also  the  Cincinnati, 
Hamilton  and  Dayton  through  trust  agreements,  one 
of  which  (1882)  was  held  to  be  void  and  the  other  (1886) 
held  to  be  voidable  {Hafer  v.  New  York,  Lake  Erie  and 
Western  Ry.  Co.,  14  Weekly  Law  Bull.  68;  Griffith  v. 
Jewett,  15  ibid.  419).  The  stock  of  the  modem  Erie,  as 
reorganized  under  the  plan  of  1895,  was  again  controlled 
by  voting  trustees,  J.  Pierpont  Morgan,  Louis  Fitz- 
gerald and  Sir  Charles  Tennant,  and  when  this  trust 
was  about  to  terminate  in  1904,  upon  the  payment  of 
the  required  dividend,  "holders  of  important  interests 


10  THE  SIGNIFICANCE  OF 

in  the  property"  strongly  urged  the  trustees  to  arrange 
for  an  extension  of  the  trust  for  five  years,  in  order  that 
''important  developments  of  the  property"  might  be 
completed  and  ''any  untoward  movement"  prevented. 
A  majority  of  the  certificate  holders  declined,  however, 
to  concur  in  an  extension  and  the  system  was  finally 
in  the  direct  control  of  the  stockholders,  subject  only 
to  the  voting  rights  held  by  two  classes  of  bondholders. 

One  of  the  most  important,  and  most  discussed,  voting 
trusts  was  that  of  the  Southern  Railway,  created  under 
the  agreement  of  October  15,  1894,  extended  by  the 
agreement  of  August  27,  1902,  and  finally  terminated 
as  of  July  31,  1914,  by  the  surviving  voting  trustees, 
Charles  Lanier  and  George  F.  Baker. 

The  most  recent  noteworthy  application  of  the  voting 
trust  arose  not  as  an  incident  of  a  reorganization  in  be- 
half of  creditors  but  as  a  result  of  the  pressure  of  the 
federal  government  in  enforcing  a  "dissolution"  of  the 
New  Haven  system.  In  accordance  with  the  decree, 
of  October  17,  1914,  of  the  United  States  District  Court 
for  the  Southern  District  of  New  York,  three  sets  of 
voting  trustees  were  created,  each  consisting  of  five 
members,  who  also  were  made  "officers  of  this  court  for 
the  purpose  of  carrying  this  decree  into  effect."  To 
ex- judge  Walter  C.  Noyes  and  associates  was  transferred 
the  entire  capital  stock  of  the  Connecticut  Company, 
then  owned  by  the  New  England  Navigation  Company; 
to  Rathbone  Gardner  and  associates  were  transferred 
all  the  capital  stock  of  the  Rhode  Island  Company, 
owned  by  the  New  Haven  itself,   and  certain  shares 


VOTING  TRUSTS  11 

and  bonds,  owned  by  the  New  England  Navigation 
Company,  of  the  Providence  and  Danielson  Railway 
Company  and  of  the  Sea  View  Railroad  Company;  and 
ex-judge  Marcus  P.  Knowlton  and  associates  took  title 
both  to  certain  shares,  then  owned  by  the  New  Haven, 
of  sixteen  companies  leased  to  the  Boston  and  Maine 
Railroad  Company,  and  also  to  the  entire  common  stock 
and  all  but  about  28,000  shares  of  the  preferred  stock 
of  the  Boston  Railroad  Holding  Company,  which  in  turn 
owned  the  controlling  stock  interest  in  the  Boston  and 
Maine  Railroad  Company.  The  trustees  in  each  instance 
have  all  the  rights  of  owners,  for  varying  terms  which 
may  extend  over  a  period  of  about  five  years,  subject  only 
to  certain  directions  as  to  the  ultimate  sale  of  the  se- 
curities held  by  them,  and  subject  also  to  detailed  pro- 
visions of  the  decree  and  further  orders  of  the  court. 
They  are  furthermore  authorized  to  issue,  with  respect 
to  the  property  held  by  them,  negotiable  certificates  of 
beneficial  interest  therein.  In  no  other  instance  has  there 
been  an  establishment,  in  a  single  transaction,  of  voting 
trusts  of  such  significance,  while  their  creation  in  this  case 
by  the  order  of  a  federal  court  may  properly  tend  to  neu- 
tralize any  criticism  of  the  procedure  in  judicial  opinions. 
The  adoption  of  a  voting  trust  has  usually  been  inci- 
dent to  the  rehabilitation  of  a  corporation  without  fore- 
closure or  to  its  reorganization  through  foreclosure,  and 
the  device  has  served  as  a  form  of  prudent  control  either 
of  the  existing  stock  or  of  the  newly  issued  stock  of  the 
successor  corporation.  Even  in  the  earlier  period,  when 
stocks  were  issued  in  amounts  and  under  circumstances 


12  THE  SIGNIFICANCE  OF 

not  later  recognized  as  correct,  the  supposed  equity 
of  the  stock  was  at  times  recognized  if  only  by  defer- 
ring its  extinction,  which  in  some  cases  was  more  than 
it  was  entitled  to;  and  although  a  corporation  might 
be  practically  bankrupt,  yet  its  corporate  life  was  ex- 
tended and  its  stock  issues  left  undisturbed,  the  actual 
control  of  the  stock  being  subjected  to  a  voting  trust 
and  practically  turned  over  to  representatives  of  the 
bondholders  who  either  refrained  from  foreclosing  or 
advanced  new  funds  or  did  both.  Thus,  in  the  more 
recent  period,  the  receivership  of  the  Chesapeake  and 
Ohio  Railway  was  terminated  (September  29,  1888) 
without  a  foreclosure  sale,  the  holders  of  about  99}^ 
per  cent,  of  the  bonds  and  99  per  cent,  of  the  stock  con- 
curring in  the  reorganization  plan  of  February  7,  1888, 
under  which  the  first  preferred  and  common  stock  were 
turned  over  to  three  voting  trustees,  J.  Pierpont  Mor- 
gan, John  Crosby  Brown  and  George  BUss. 

A  corporation  with  assets  of  a  book  value  in  excess 
of  its  bonded  indebtedness,  and  with  apparently  some 
equity  in  its  stock,  might  yet  be  unable  to  maintain  its 
interest  payments  and  avoid  a  receivership.  The  strict 
process  would  then  be  a  foreclosure  of  the  mortgage 
in  default  and  a  sale  under  conditions  in  which  rarely 
could  more  than  the  amount  of  the  mortgage  indebt- 
edness be  realized,  with  the  result  that  the  title  of  the 
original  corporation  would  be  divested  and  its  stock 
made  worthless.  This  process,  with  its  technically 
correct  but  unfortunate  result,  has  ordinarily  been 
avoided  by  the  intervention  of  a  purchasing  committee 


VOTING  TRUSTS  13 

or  reorganization  committee  or  of  so-called  reorgani- 
zation managers.  These  have  directed  their  attention 
to  devising  a  reorganization  plan  which  would  effect 
an  equitable  result  among  all  parties  in  interest,  also 
saving  in  part  the  precarious  investment  of  the  stock- 
holders by  allotting  to  them  stock  in  the  new  corpo- 
ration on  fair  conditions.  The  bondholders,  or  the  com- 
mittee representing  them,  are  usually  in  a  position  to 
compel  a  foreclosure  sale,  and,  if  it  is  held,  to  control 
it  in  the  interest  of  the  bondholders  alone  and  thus  to 
eliminate  the  stockholders.  While  able  in  this  way  to 
dictate  the  terms  of  a  reorganization,  they  have  often 
admitted  the  old  stockholders  to  participation  in  a  re- 
organization on  equitable  terms,  such  as  the  payment 
of  an  assessment,  properly  requiring  also  that  the  con- 
trol of  the  new  stock  should  be  so  placed  as  to  prevent 
a  disturbance  in  the  value  either  of  the  securities  or 
of  the  stock  itself.  In  fact,  such  certainty  of  careful 
management  of  the  stock  is  often  an  essential  element 
in  securing  the  acceptance  of  a  reorganization  plan  by 
those  whose  concurrence  is  indispensable  to  its  success. 
"The  stockholder  who  wished  to  stand  on  his  legal  rights 
might  of  course  do  so,  and  omit  to  pay  the  assessment, 
and  retain  his  valueless  stock,  as  many  have  done.  The 
only  material  effect  on  the  reorganization  of  such  elec- 
tion would  be  to  decrease  the  amount  of  cash  controlled 
by  the  reorganization  committee  and  increase  the  amount 
of  unallotted  new  stock  or  voting  trust  certificates  which 
the  committee  might  sell  to  the  public,  if  necessary, 
or  turn  over  to  the  new  company. 


14  THE  SIGNIFICANCE  OF 

While  in  its  early  form,  as  already  suggested,  the  vot- 
ing trust  was  simple  and  the  power  and  discretion  vested 
in  the  trustees  closely  analogous  to  those  of  legal  owners, 
nevertheless  by  degrees  limitations  were  imposed  on 
the  freedom  of  action  of  the  trustees.  Thus,  it  was 
provided  that  they  might  not  consent  to  mortgaging 
the  concern's  property  or  concur  in  a  change  of  its  cap- 
italization without  securing  the  approval  of  holders 
of  a  stated  proportion  of  outstanding  trust  certificates. 
Likewise  the  certificate  holders  were  at  times  given  a 
voice  in  deciding  upon  the  dissolution  of  the  trust,  and 
in  exceptional  instances  they  have  been  given  power 
to  instruct  the  trustees,  as  with  respect  to  the  choice 
of  directors  and  in  other  particulars.  In  general,  how- 
ever, the  practical  tendency  has  been  to  confine  the 
functions  of  the  voting  trustees  to  the  choice  of  a  board 
of  directors,  the  receipt  of  dividends  and  the  distribu- 
tion of  amounts  so  received,  and  the  discretionary  power 
of  terminating  the  trust.  These  functions,  to  be  sure, 
comprise  the  normal  purposes  of  the  ordinary  voting 
trust,  and  it  is  through  the  proper  exercise  of  the  first 
power  stated  that  the  real  object  of  the  trust  is  secured, 
that  is,  the  maintenance  of  such  a  board  of  directors 
as  will  provide  for  the  corporation  an  administration 
tending  to  estabUsh  and  develop  a  consistent  and  con- 
tinuous policy  in  its  affairs. 

Ordinarily,  the  object  aimed  at  in  a  voting  trust  has 
been  the  protection  of  the  bondholders,  not  indeed  by 
actually  improving  in  any  technical  manner  the  status 
of  their  securities,  but  chiefly  by  procuring  for  them 


VOTING  TRUSTS  15 

such  practical  advantage  as  may  arise  from  a  well  con- 
sidered conduct  of  a  corporation's  affairs.  This  attempt 
to  strengthen  the  credit  of  a  corporation,  by  withdraw- 
ing the  actual  control  from  those  holding  only  stock, 
is  natural  in  view  of  the  fact  that  in  most  reorganiza- 
tions the  stock  of  the  new  company  represents  a  much 
smaller  proportion  of  cash  investment  than  do  the  out- 
standing bonds.  Moreover,  the  new  bonds,  represent- 
ing to  a  greater  extent  an  actual  cash  investment,  could 
not  be  sold,  and  could  not  be  successfully  offered  in  a 
plan  of  reorganization,  unless  their  value  should  be 
maintained  not  only  by  the  usual  legal  safeguards  but 
also  by  some  assurance,  in  a  binding  form,  of  correct 
management. 

This  general  object  of  a  voting  trust  has  been  repeat- 
edly recognized,  and  in  a  variety  of  terms.  Thus,  it  has 
been  stated  as  being  an  assurance  of  the  "conservative 
management  of  the  property"  (Chicago  Railways);  and 
"to  assure  continuity  of  efficient  and  proper  manage- 
ment" (International  Fire  Engine);  and  because  it  was 
considered  "of  importance  that  the  policy  of  the  present 
management  should  be  continued"  (International  Mer- 
cantile Marine);  and  for  "the  express  purpose  of  contin- 
uing the  policy  of  the  company  as  an  independent  organ- 
ization" (Lehigh  Coal  and  Navigation);  and  "to  better 
secure  an  administration  of  the  system  independent  of 
the  control  of  all  other  interests,  and  for  the  better  secur- 
ity of  the  holders  of  the  bonds  and  stocks  of  the  reorgan- 
ized or  new  company"  (Kansas  City  Southern);  and  as 
being  "in  furtherance  of  the  independent  reorganizatioi^ 


16  THE  SIGNIFICANCE  OF 

and  administration  of  the  property,  and  to  promote 
and  protect  the  value  of  the  securities  of  the  new  com- 
pany" (Northern  Pacific);  and  "for  the  protection  of 
the  creditor  class  assenting  hereto"  (Philadelphia  and 
Reading);  and,  often,  "as  additional  protection  to  the 
new  mortgage  bonds"  (St.  Louis  and  San  Francisco) ;  and, 
as  more  fully  stated  in  the  Allis-Chalmers  trust  agree- 
ment, in  order  "to  secure  for  the  common  benefit  of  the 
holders  of  the  preferred  and  common  capital  stock  of 
the  Company  impartial,  stable  and  satisfactory  man- 
agement of  the  business  policy  and  property  of  the 
Company  and  protection  of  the  value  of  the  enter- 
prise during  the  period  of  five  years."  The  purpose  was 
well  stated  in  the  reorganization  plan  (May  25,  1903) 
of  the  United  States  Shipbuilding  Company  (although 
the  voting  trust  was  omitted  from  the  amended  plan 
of  January  30,  1904)  as  follows:  "To  assure  continuity 
in  the  management  of  the  new  corporation  for  a  suffi- 
cient number  of  years  during  which  the  improvements 
and  developments  of  all  the  properties  of  the  United 
States  Shipbuilding  Company  and  the  Bethlehem  Steel 
Company  are  to  be  undertaken  and  completed,  and  to 
assure  such  management  support  and  stability,  a  voting 
trust  of  the  entire  capital  stock  of  the  new  corporation 
will  be  created  to  be  in  force  for  a  period  of  seven  years." 
Such  general  statements  merely  illustrate  the  avowed 
object  of  the  voting  trust  as  usually  expressed  in  re- 
organization agreements.  Its  specific  purpose  and  its 
justification  are  still  more  clearly  shown  by  the  provi- 
sions of  the  voting  trust  agreement  itself  tending  to 


VOTING  TRUSTS  17 

secure  the  object  desired.  Whether  the  new  policy 
or  the  new  management  has  been  sufficiently  tested 
and  approved,  and  whether  the  stock  may  be  safely 
released  so  as  to  permit  a  possible  change  of  control, 
depends  entirely  upon  the  condition  of  the  corporation's 
business.  Whether  this  is  at  last  soundly  established 
is  determined  in  a  variety  of  ways,  as  shown  by  the 
different  provisions  for  the  dissolution  of  the  voting 
trust  on  the  happening  of  a  stated  event.  Thus,  it  has 
been  provided  that  the  voting  trust  should,  at  the  latest, 
be  terminated  whenever  (often  after  a  five-year  period 
or  other  term)  the  general  mortgage  bonds  had  received 
four  per  cent,  for  two  years  (Central  New  England); 
when  the  first  preferred  stock  had  received  four  per 
cent,  for  three  years  (Colorado  and  Southern),  or  for 
two  years  (St.  Louis  and  San  Francisco);  when  the 
preferred  stock  had  received  four  per  cent,  for  two  years 
(Mexican  National)  or  five  per  cent,  for  three  years 
(Northwestern  Elevated);  or,  for  an  extreme  case,  when 
both  classes  of  stock  had  received  five  per  cent,  for  five 
consecutive  years  (Omaha  Water).  Whatever  the  test 
in  a  particular  case,  it  has  been  such  that  if  it  should 
be  met  it  might  properly  be  assumed  that  the  theoreti- 
cal security  of  the  bondholders  had  been  shown  to  be 
actual,  and  that  therefore  the  need  for  a  close  control 
of  the  stock  had  passed. 

In  the  case,  however,  of  a  corporation  with  no  bonds 
outstanding  and  no  excess  of  liabilities  over  assets,  the 
adoption  of  a  voting  trust  may  not  be  regarded  as  for 
the  purpose  of  affording  protection  to  security  holders 


18  THE  SIGNIFICANCE  OF 

or  other  creditors,  but  rather  for  the  simpler  purpose 
of  insuring,  for  the  benefit  of  a  majority  of  the  stock- 
holders themselves,  a  control  of  the  corporation  which 
should  guarantee  for  a  reasonable  period  a  satisfactory 
policy  and  a  management  of  well-understood  charac- 
ter. Where  the  stockholders  are  thus  in  a  position  to 
control  a  readjustment  free  from  any  dictation  by  credi- 
tors, the  creation  of  a  voting  trust  may  be  unnecessary 
and  may  appear  to  be  undesirable.  In  few  important 
instances  has  a  voting  trust  been  created  under  such 
circumstances,  and  then  only  for  what  were  at  the  time 
apparently  controlling  or  commendable  reasons.  As  a 
detail  of  a  voluntary  arrangement  by  the  stockholders 
themselves,  in  the  conspicuous  instance  of  the  Inter- 
national Harvester  (1902)  a  voting  trust  was  formed, 
although  naturally  not  prompted  by  any  requirement 
of  creditors.  It  is  now  plain  that  the  new  company 
represented  a  combination  of  earlier  distinct  concerns, 
and  the  adoption  of  a  voting  trust  would  have  seemed 
justifiable  simply  in  order  to  avoid  the  possibility  of 
any  change  of  policy  due  to  natural  differences  of  opin- 
ion among  groups  newly  brought  together,  as  well  as 
in  order  to  prevent  the  control  under  any  contingency 
passing  from  those  who  had  been  instrumental  in  de- 
veloping and  reorganizing  the  industry.  Thus,  also, 
by  arrangement  among  all  the  stockholders,  in  the  case 
of  the  Bankers  Trust  Company  (1902),  the  entire  stock 
was  subjected  to  a  voting  trust  and  not  as  a  detail  of 
reorganization.  Especially  in  such  instances,  in  which 
the  holders  of  the  entire  stock  agree  to  place  their  hold- 


VOTING  TRUSTS  19 

ings  in  a  valid  trust,  there  seems  to  be  no  ground  for 
proper  objection  on  the  part  of  anyone,  as  the  arrange- 
ment is  one  of  free  contract  among  the  parties  in  inter- 
est. Even  so  early  a  critic  of  voting  trusts  as  Governor 
Baldwin  apparently  would  approve  such  a  trust  when 
based  on  the  unanimous  consent  of  all  stockholders 
(1  Yale  Law  Journal,  11). 

If  the  majority  only  of  the  stockholders,  as  in  the 
case  of  the  Guaranty  Trust  Company  (1910),  desire 
to  create  a  valid  trust  for  no  illegal  purpose  there  also 
can  be  offered  no  proper  objection,  although  remon- 
strances of  minority  stockholders,  and  others,  are  not 
infrequently  expressed.  As  a  matter  of  fact,  the  inter- 
est of  a  small  stockholder  is  ordinarily  not  jeopardized 
by  such  an  arrangement,  while  it  frequently  is  bene- 
fited. Objections  by  minority  holders  are  usually  based 
upon  grounds  of  policy  or  of  personnel.  If  on  the  former, 
the  practical  answer  is  that  the  choice  of  a  prudent 
policy  is  as  vital  to  the  holders  of  trust  certificates  as 
to  minority  stockholders,  and  that  voting  trustees  have 
seldom  acted  in  a  manner  inconsistent  with  their  trust, 
and  usually  indeed  have  had  no  incentive  to  do  so.  So 
far  as  objection  has  been  raised  on  grounds  of  personnel, 
the  objection  itself  states  the  case.  The  advantage  herein 
of  the  voting  trust  is  that  for  a  fixed  period  the  course 
of  the  concern  is  not  guided  by  decisions  on  personali- 
ties. Such  questions,  or  ambitions,  are  not  infrequently 
at  the  beginning  of  contests  for  control  among  groups 
of  stockholders;  and  seldom  from  these  contests  does 
any  benefit  arise  to  the  concern  itself.    These  of  course 


20  THE  SIGNIFICANCE  OF 

tend  also  to  make  a  board's  tenure  uncertain  and  the 
endurance  of  any  particular  policy  indefinite,  and  it  is  in 
the  avoidance  of  these  features  that  the  voting  trust  has 
merited  approval. 

It  is  rare  that  a  voting  trust  is  so  formed  as  to  tend 
to  insure  a  perpetual  or  even  an  unduly  prolonged  con- 
trol by  the  voting  trustees.  Indeed,  it  is  noteworthy 
that  in  few  instances  does  it  appear  that  such  a  trust 
has  been  created  primarily  for  the  purpose  of  main- 
taining control  in  the  hands  of  those  who  might  not 
otherwise  be  able,  or  entitled,  to  exercise  it.  On  the 
contrary,  in  practically  all  instances  of  importance  it 
is  obvious  that  the  design  has  been  to  secure  and  main- 
tain control  not  for  its  sake  alone,  but  to  insure  con- 
servative conduct  of  the  corporation's  affairs  for  the 
benefit  both  of  the  security  holders  and  of  the  stock- 
holders themselves.  Occasionally  apparent  exceptions 
even  to  such  a  statement  will  be  found,  as  when  at  one 
time  the  voting  trustees  of  the  Central  New  England 
Railway  held  only  slightly  more  than  50Vi3  per  cent, 
of  the  total  outstanding  stock,  or  as  when  the  voting 
trustee  of  the  United  Cigar  Manufacturers  Company 
held  merely  51  per  cent,  of  the  common  stock. 

In  the  great  majority  of  instances  the  voting  trust  has 
been  only  for  the  period  of  five  years,  a  limit  apparently 
adopted  in  recognition  of  the  New  York  statute,  and 
elsewhere  used  in  imitation  of  what  there  has  become 
practically  a  universal  term,  due  to  regarding  as  re- 
strictive what  may  possibly  be  deemed  a  permissive 
phrase  in  the  law  (sec.  25,  Gen.   Corp.  Law).      Some, 


VOTING  TRUSTS  21 

however,  have  been  for  seven  years  (Denver  Railway 
Securities),  eight  years  (Deere  &  Co.)  ten  years  (Chicago 
Southern,  National  Asphalt,  Quaker  Oats,  Booth  Fish- 
eries), and  fifteen  years  (Central  American  Growers, 
First  National  Bank  of  Tarboro).  The  provisions  of 
the  Chicago  Railways  participation  agreement  indicate 
that  the  voting  power  of  the  depositaries  may  endure  at 
least  for  a  twenty-year  period,  while  that  of  the  Atlantic 
and  Pacific  was  originally  for  thirty  years,  and  that 
discussed  in  Warren  v.  Pirn  (66  N.  J.  Eq.  353;  1904) 
was  for  fifty  years.  The  voting  trust  in  connection  with 
the  Chicago  City  and  Connecting  Railways  Collateral 
Trust  was  drawn  in  such  terms  that  it  might  continue 
during  the  fives  of  eight  designated  persons  and  for 
twenty  years  after  the  decease  of  the  survivor  {Venner 
V.  Chicago  City  Railway  Co.,  258  111.  523;  1913).  Such 
trusts  for  more  than  five  years  are  in  fact  exceptional, 
and  one  for  the  life  of  the  corporation  itself  (Consumers 
Gas  Trust)  was  indeed  an  anomaly.  Very  few  have 
been,  either  in  terms  or  as  judicially  interpreted,  prac- 
tically perpetual  (Omaha  Water),  while  one  perhaps 
most  indefinite  in  duration,  and  apparently  incapable 
of  termination  by  action  on  the  part  of  the  parties  most 
interested,  was  in  fact  created  by  statute  (New  York, 
Ontario  and  Western). 

.  The  use  of  a  voting  trust  has  been  criticised  as  readily 
tending  to  undue  concentration  of  power,  and  while 
this  criticism  is  in  a  measure  correct,  it  is  significant 
that  in  no  important  instance  has  power  so  acquired 
been    abused.     Indeed,    responsibihty   has   been   more 


22  THE  SIGNIFICANCE  OF 

specifically  located,  and  a  small  body  of  trustees  has 
naturally  been  more  solicitous  of  acting  correctly  than 
is  always  the  case  with  a  temporary  proxy  committee 
or  with  a  large  board  whose  size  alone  tends  to  mini- 
mize the  feature  of  personal  responsibility.  Moreover, 
the  use  of  the  voting  trust  has  unquestionably  pro- 
duced fixity  of  well-considered  policies,  the  maintenance 
of  harmonious  administration  for  a  period  sufficient  to 
test  such  policies,  and  at  the  same  time  has  secured  the 
more  consistent  personal  attention  of  advisers  com- 
manding the  confidence  of  those  whose  capital  was  in- 
volved. Rarely,  if  ever,  has  a  justified  attack  been  made 
on  the  conduct  of  a  well  chosen  group  of  voting  trustees. 
To  be  sure,  the  voting  trust  of  the  St.  Louis,  Arkansas 
and  Texas  was  later  said  to  have  been  "established 
as  a  supposed  protection  for  bondholders,"  and  some 
of  the  early  voting  trusts  in  the  interest  of  foreign  in- 
vestors received  unfavorable  comment  due  rather  to 
conditions  incident  to  absentee  ownership  than  to  the 
effect  of  the  voting  trusts.  Occasionally,  a  voting  trust 
has  been  used  under  such  circumstances  as  to  arouse 
criticism  or  misunderstanding,  as  in  the  cases  of  the 
Bankers  Life  Insurance  Company  {Knickerbocker  In- 
vestment Co.  V.  Voorhees,  100  App.  Div.,  N.  Y.,  414; 
1905)  and  of  the  Parkes  Manufacturing  Company  {Sul- 
livan V.  Parkes,  69  App.  Div.,  N.  Y.,  221;  1902);  and 
rarely  a  protective  committee  has  even  had  authority 
from  its  depositors  to  institute  an  action  for  the  dissolu- 
tion of  a  voting  trust,  as  in  the  case  of  the  Seaboard 
Air  Line  (1904). 


VOTING  TRUSTS  23 

Some  writers,  especially  before  voting  trusts  had 
been  examined  with  care,  condemned  them  rather  more 
freely  than  the  facts  and  the  law  warranted.  Thus 
it  has  been  said  (1902):  "The  collective  counsel  and 
wisdom  of  all  whose  interests  are  bound  up  in  the 
corporation  is  supplanted  by  an  alien  and  selfish  voice 
in  all  measures  which  have  to  do  with  its  success.  The 
courts  do  not  regard  voting  trusts  with  favor"  (36  Amer. 
Law  Rev.  222).  Litigation  has  naturally  produced  many 
opinions  illustrating  both  views  on  the  general  ques- 
tion, one  of  the  most  searching  analyses  being  that  of 
Justice  Mahlon  Pitney  in  Warren  v.  Pirn  (66  N.  J.  Eq. 
353;  1904).  The  most  noteworthy  criticism  of  voting 
trusts,  and  one  important  chiefly  because  of  its  char- 
acter as  a  congressional  document,  was  that  contained 
in  the  report  to  the  House  of  Representatives  of  the 
so-called  Pujo  Committee  (1913),  which  alluded  in 
graphic  terms  to  the  "defenseless  security  holders" 
and  to  the  absence  of  "any  protection  offered  to  the 
security  holders  against  oppression  or  injustice"  in 
the  course  of  reorganizations  resulting  in  voting  trusts. 
Mention  was  significantly  made  of  several  voting  trusts, 
all  but  one  of  which  have  now  terminated,  and  with 
all  of  which  a  single  banking  firm  was  in  some  degree 
identified.  No  mention  was  made  of  other  important 
voting  trusts,  as  that  in  the  Seaboard  Air  Line,  and  no 
evidence  was  introduced  before  the  committee  to  demon- 
strate adequately  whether  voting  trusts  have  in  general 
been  a  constructive  benefit  or  an  evil.  And  yet  it  has 
been  said  of  them:  "They  have  very  generally  been  op- 


24  THE  SIGNIFICANCE  OF 

pressively  imposed  by  large  interests  upon  a  prostrate 
defenseless  property  in  course  of  reorganization  where 
the  interests  were  scattered,  unable  to  protect  them- 
selves and  virtually  forced  to  surrender  their  voting 
power  upon  the  demand  of  the  reorganizers "  (Samuel 
Untermyer,  A  Legislative  Program,  1914,  p.  25).  The 
activity  of  the  Pujo  Committee  is  generally  credited 
with  influencing  the  dissolution  of  the  voting  trusts  of 
the  stocks  of  the  Bankers  Trust  Company  and  Guar- 
anty Trust  Company,  and  it  was  later  stated  (before 
the  Owen  Committee  of  the  United  States  Senate,  1914), 
that  these  trusts  were  "dissolved  and  disbanded  as  a 
direct  result  of  the  exposure  of  their  existence"  {Testi- 
mony, p.  77).  But  even  this  result  was  probably  of 
no  real  advantage  whatever  to  the  companies  concerned 
or  to  their  stockholders,  and  indeed  of  no  great  signifi- 
cance, except  as  it  served  as  an  illustration  of  the  im- 
portance of  "public  opinion"  as  represented  by  a  con- 
gressional committee  exhibiting,  as  to  this  subject,  more 
vigor  than  thoroughness  and  more  power  of  expression 
than  of  analysis. 

As  indicating  the  type  of  men  usually  chosen  to  serve 
as  voting  trustees,  as  well  as  the  reason  for  such  trusts, 
the  following,  from  an  anonymous  correspondent,  is 
significant:  "Any  one  who  looks  carefully  into  the  origi- 
nal formation  of  the  Chesapeake  &  Ohio,  Northern 
Pacific,  the  Reading,  and  the  Erie  Railway  voting  trusts, 
which  have  expired,  and  of  the  Southern  and  the  Chicago 
Great  Western  voting  trusts,  which  are  still  in  existence 
(the  six  just  named  being  the  chief  examples  in  this 


VOTING  TRUSTS  25 

country),  will  learn  that,  in  every  instance  prior  to  the 
reorganization  of  the  property,  the  bankruptcy  of  the 
road  had  been  due  to  faulty  management,  and  that  it 
was  impossible,  in  working  out  the  reorganization,  to 
secure  the  co-operation  of  the  bondholders  and  of  the 
stockholders  (who,  in  the  latter  instance,  were  frequently 
compelled  to  pay  heavy  assessments),  unless  some  war- 
ranty were  given  to  these  security  holders  that  their 
recreated  'child'  should  be  looked  after  by  men  of 
character  until  it  outgrew  its  swaddUng  clothes.  The 
only  way  to  attain  such  a  warranty  was  to  persuade 
men  of  abihty  and  character  to  give  their  names  to  the 
enterprise  as  voting  trustees  of  the  stock  for  the  ini- 
tial period  of  years"  (New  York  Evening  Post,  Decem- 
ber 21,  1912). 

The  motive  in  the  proposal  of  a  voting  trust  is  illus- 
trated by  the  circular  of  Kidder,  Peabody  and  Co. 
(1889),  as  to  the  Atchison:  ''During  the  progress  of  the 
reorganization  it  has  been  frequently  suggested  in  the 
public  press  and  by  numerous  and  large  holders  of 
the  company's  securities  that  it  would  give  greater 
stability  to  the  reorganized  company  if  a  management 
committed  to  the  successful  working  out  of  the  plan 
of  reorganization,  and  absolutely  in  the  interest  of  the 
property,  could  be  secured  for  several  years. 

"Consulting  our  own  inclination  and  convenience,  we 
would  prefer  to  leave  the  management  of  this  great 
property  to  others;  but  we  recognize  the  force  of  the 
suggestion  and  the  necessity  of  some  other  arrange- 
ment,   and,    as   many   shareholders   believe   that   great 


26  THE  SIGNIFICANCE  OF 

advantages  are  likely  to  result  to  the  holders  of  all  classes 
of  the  company's  securities  from  such  co-operation, 
we  have  consented  to  act  in  the  matter."  The  sugges- 
tion was  commented  upon  at  the  time  in  the  following 
terms:  "Having  reached  this  stage,  it  is  natural  to  seek 
a  continuance  and  further  development  of  the  good 
results  already  attained.  In  fact  a  perpetuation  of  the 
existing  policy,  and  the  keeping  of  control  in  present 
hands,  appears  to  those  directing  Atchison  affairs  the 
one  thing  necessary  to  round  up  and  complete  the  work 
of  reorganization  and  renovation  in  a  practical  and 
satisfactory  manner.  Hence  Messrs.  Kidder,  Peabody 
&  Co.  propose  the  establishment  of  a  voting  trust.  The 
point  which  it  is  sought  to  guard  against  is  of  course 
the  danger  of  having  the  property  pass  into  the  control 
of  rival  systems,  or  into  the  hands  of  unscrupulous  and 
designing  men,  who  would  reverse  the  new  policy  and 
manage  the  property  for  speculative  purposes"  {Com.  & 
Fin.  Chron.,  December  21,  1889). 

This  danger  was  well  expressed  by  the  voting  trus- 
tees of  the  Southern  Railway  (August  27,  1902),  who 
said  that  if  the  trusteed  stock  were  to  be  released  and 
dealt  in  on  the  market  it  would  be  ''possible  for  the 
control  of  the  Company  to  be  bought  and  sold  from 
day  to  day  and"  render  ''its  policy  and  managemen': 
subject  to  sudden  and  surprising  change."  And  so, 
in  the  case  of  the  Pittsburgh  Coal  Company,  a  voting 
trust  was  proposed  in  order  to  "prevent  the  control  of 
the  property  passing  to  new  interests  to  the  detriment 
of  the  value  of  the  shares,  ..." 


VOTING  TRUSTS  27 

The  general  purpose  is  also  illustrated  by  the  following 
statement  as  to  the  five-year  voting  trust  of  the  New  York 
and  New  England  Railroad  Company:  "The  repeated 
changes  of  management  to  which  it  has  been  subjected 
during  the  past  twelve  years  has  naturally  had  a  bad 
effect  upon  its  credit  and  its  business.  Railroad  men 
have  been  averse  to  entering  its  directory  and  to  taking 
a  hand  in  the  direction  of  its  affairs,  just  because  of  the 
uncertainty  as  to  their  retention  for  a  sufficient  length 
of  time  to  demonstrate  what  the  road  could  do"  (Boston 
Traveler,  June  13,  1892). 

In  addition  to  such  pertinent  arguments  in  favor  of 
the  advisability  of  voting  trusts,  there  should  be  borne 
in  mind  one  practical  consideration.  The  reviving  of  a 
helpless  concern  is  usually,  and  naturally,  entrusted 
to  a  banking  firm  or  a  group  of  bankers.  They  or  their 
friends  are  expected  in  the  end  to  market  the  securities 
of  the  reorganized  company  and  they  are  entitled  to 
take  all  proper  steps  both  for  protecting  their  customers 
and  for  insuring  correct  management  of  a  company  of 
which  they  are  regarded  as  financial  sponsors.  As  a 
director  of  a  much  reorganized  concern,  after  one  of  its 
experiences,  said  concisely:  "Naturally  the  people  who 
put  up  the  new  money  required  voting  trustees  for  the 
present  time."  Through  fees  as  reorganization  mana- 
gers and  commissions  as  syndicate  managers  their  own 
remuneration,  or  profit,  is  usually  secured  shortly  after 
the  reorganization  is  consummated,  and  their  interest 
might  well  then  cease  if  they  had  no  regard  for  the  effect 
on  their  reputation  of  the  result  of  their  work.     Their 


28  THE  SIGNIFICANCE  OF 

possible  profit  in  controlling  future  underwritings  is 
negligible  as  compared  with  the  effect  on  their  business 
of  having  incompletely  managed  a  futile  reorganization. 
Notwithstanding  the  apparent  reasons  for  approving 
the  establishment  of  such  a  trust  in  many  instances, 
there  has  been  considerable  condemnation  of  the  device. 
Thus  the  doctrine  has  been  frequently  advanced  that 
each  stockholder  is  entitled  to  the  judgment  of  his  fel- 
low stockholders.  As  the  functions  of  the  stockholders 
are  ordinarily  restricted  to  the  choice  of  directors,  this 
doctrine  would  rest  on  the  proposition  that  at  elections 
each  stockholder  should  express  his  individual  choice 
in  the  manner  most  advantageous  to  the  corporation. 
While  not  altogether  overthrown  by  the  recognition 
of  the  fact  that  the  majority  may  vote  practically  as 
they  wish  and  may  indeed  control  the  corporation  (Barnes 
v.  Brown,  80  N.  Y.  527;  1880),  and  that  the  majority 
may  act  unwisely  (Matter  of  Argus  Co.,  138  N.  Y.  557; 
1893),  the  doctrine  has  nevertheless  been  now  converted 
into  a  fiction  by  the  mere  development  of  corporations. 
It  has  become  inapplicable,  if  for  no  other  reason,  by 
the  increase  in  size  of  corporations.  In  a  corporation 
with  ten  thousand  stockholders,  and  even  in  one  with 
a  few  hundred,  it  is  impossible  to  apply  a  town  meeting 
system  to  the  selection  of  a  group  of  individuals,  es- 
pecially where  the  selection  has  to  depend  on  elements 
of  personality  which  ordinarily  cannot  be  helpfully  de- 
bated in  mass  meeting.  That  the  real  exercise  of  in- 
dividual judgment  by  the  stockholders  at  large  is  not 
only  a  thing  of  the  past,  but  indeed  an  impossibility,  is 


VOTING  TRUSTS  29 

demonstrated  by  the  facts  that  on  March  1,  1915,  the 
stock  of  the  Pennsylvania  Railroad  Company  was  held 
by  92,225  persons  and  that,  on  December  31,  1914, 
there  were  59,415  stockholders  in  the  American  Tele- 
phone and  Telegraph  Company.  Thus  the  theory  that 
"each  stockholder  is  entitled  to  the  presence  of  his  asso- 
ciates to  the  end  that  they  shall  reason  and  be  reasoned 
with,"  necessarily  becomes  entirely  inapplicable.  This 
line  of  suggestion  has  been  waived  aside  as  "the  argu- 
ment ab  iiiconvenienti,"  and  as  presenting  "a  question 
rather  for  the  legislature  than  for  the  courts"  (Warren 
V.  Pirn,  66  N.  J.  Eq.  353,  399;  1904).  It  must  be  ad- 
mitted, however,  that  the  inconvenience  is  real  and 
that  its  effects  cannot  be  ignored  even  by  the  courts. 
As  an  authority  has  recently  written:  "Theoretically 
the  stockholders  elect  the  directors,  but  that  theory 
has  broken  down  as  applied  to  railroads  and  other  great 
corporations.  The  stockholders  still  have  the  power, 
but  do  not  and  cannot  exercise  it.  They  are  multi- 
tudinous, widely  scattered,  many  of  them  women  and 
estates"  (W.  W.  Cook,  New  York  Sun,  April  12,  1914). 
Such  conditions  render  of  doubtful  weight  a  judicial 
statement  that  stock  should  be  voted  "according  to 
the  judgment  of  each  individual  stockholder  for  the 
benefit  of  the  entire  corporation"  {Harvey  v.  Linville 
Improvement  Co.,  118  N.  C.  693,  699;  1896),  and  a  de- 
cision, even  in  a  case  where  proxies  were  not  authorized, 
which  speaks  of  "the  obligation  of  all  the  members  to 
assemble  together"  at  a  corporate  election  {Common- 
wealth v.  Bringhurst,   103  Pa.  St.   134;  1883).     Never- 


30  THE  SIGNIFICANCE  OF 

theless,  the  ideal  conception  of  the  stockholder's  rights 
has  not  wholly  disappeared,  and  has  more  recently  been 
expressed,  with  a  slight  modification,  as  follows:  "The 
real  stockholder,  at  the  stockholders'  meeting,  has  a 
right  to  have  the  other  real  stockholders  present  in 
person  or  by  proxy  for  the  purpose  of  considering  the 
well-being  of  the  company"  {Bache  v.  Central  Leather 
Co.,  78  N.  J.  Eq.  484;  1911). 

The  recognition  of  such  conditions  has  led  to  the 
development  of  the  ''proxy  committee"  as  an  agency 
by  which  the  group  administering  a  corporation  secure 
two  necessary  results;  the  actual  representation  of  a 
quorum  at  a  stockholders'  meeting  and  the  election  of 
a  board  in  harmony  with  the  existing  policy  of  the  cor- 
poration and  presumably  composed  of  the  men  best 
qualified  to  carry  on  that  policy.  The  ''proxy  commit- 
tee" is  commonly  organized  each  year,  especially  where 
this  deference  is  due  to  statutory  limitations  as  to  the 
duration  of  proxies,  and  usually  its  selection  is  frankly 
at  the  instance  of  the  existing  board  of  directors.  As 
such  proxies  often  run  in  favor  of  three  nominees,  or 
a  majority  of  them,  or  in  some  instances  any  one  of  them, 
the  actual  voting  power  is  for  the  time  being  as  closely 
held  as  ever  by  voting  trustees,  while  the  control  of  the 
stockholders'  meeting  is  fully  as  effective.  In  some 
companies  the  practice  is  to  ask  the  stockholder  to  give 
his  proxy,  with  power  of  substitution,  to  any  one  of  the 
directors,  all  the  directors  then  possibly  substituting 
the  same  person  actually  to  exercise  the  vote.  Thus, 
at  a  recent  annual  meeting  of  the  New  York,  New  Haven 


VOTING  TRUSTS  31 

and  Hartford  Railroad  Company  (October  28,  1914) 
the  president  of  the  company  is  reported  to  have  exer- 
cised proxies  with  respect  to  more  than  sixty  per  cent, 
of  the  outstanding  stock  of  the  company  and  more  than 
ninety-eight  per  cent,  of  that  represented  at  the  meet- 
ing. As  a  matter  of  fact  the  minority  stockholder  is 
seldom  in  such  instances  any  more  efficiently  or  inde- 
pendently represented  than  when  his  original  stock 
is  voted  by  voting  trustees.  While  the  practice  indicated 
has  become  quite  universal,  it  is  interesting  to  note 
the  contention  that  the  use  by  the  board  of  the  com- 
pany's funds  in  circularizing  the  stockholders  for  prox- 
ies, in  order  to  assure  to  the  board  the  control  of  the 
voting  power,  is  unlawful  (Brief  of  Clarence  A.  Seward, 
Esq.,  in  Woodruff  v.  Dubuque  and  Sioux  City  R.  R. 
Co.,  19  Abb.  N.  C.  437;  1887). 

One  criticism  of  the  voting  trust  has  arisen  really 
from  the  circumstance  that  the  existence  of  the  trust 
may  be  unknown  to  the  public,  especially  if  the  trust 
certificates  are  not  listed  on  a  stock  exchange,  and  that 
there  may  thus  be  some  implied  misrepresentation  to 
the  public  in  holding  out  as  directors,  presumably  elected 
by  individual  stockholders,  those  who  are  in  fact  chosen 
by  the  voting  trustees.  The  apparent  theory  of  this 
criticism  is  that  directors  so  elected  are  not  substan- 
tially interested  in  the  corporation  itself;  but  it  has 
happened  that  in  many  corporations  directors  of  im- 
portance elected  by  the  stockholders  themselves  have 
actually  owned  only  a  few  shares  of  stock,  and  even 
have  first  acquired  stock  after  their  election.     Another 


32  THE  SIGNIFICANCE  OF 

criticism  is  directed  to  the  election  of  directors  with- 
out any  participation  on  the  part  of  those  who  may 
be  termed  the  equitable  stockholders;  but  this  is  scarcely 
more  objectionable  than  the  system  of  election  through 
the  intervention  of  a  proxy  committee.  In  both  cases 
the  election  may  often  be  controlled  by  a  very  few  in- 
dividuals, with  the  important  difference  that  the  re- 
sponsibilities of  the  voting  trustees  do  not,  like  those 
of  the  proxy  committee,  end  with  the  voting  at  a  particu- 
lar election.  The  real  defect  herein  is  due  to  the  circum- 
stance that  in  the  more  common  forms  of  voting  trust 
the  holders  of  the  trust  certificates  are  in  a  sense  a  neg- 
ligible factor  during  the  term  of  the  trust,  particularly 
in  those  instances  in  which  no  provision  is  made  for  meet- 
ings of  the  certificate  holders  or  other  means  by  which 
their  preferences  may  be  expressed.  If  actual  facts 
are  duly  considered,  the  conduct  of  a  corporation  whose 
stock  is  held  by  voting  trustees  is  often  not  unlike  that 
of  a  corporation  whose  stock  is  held  directly  by  stock- 
holders, for  the  reason  that  in  many  corporations  the 
stockholders  are  so  influenced  or  tied  that  the  voting 
power  of  a  majority  of  the  stock  may  be  practically 
controlled  by  very  few  stockholders.  On  the  other 
hand,  if  these  few  are  holding  the  stock  as  trustees  there 
is  established  a  definite  responsibility  and  a  new  rela- 
tion which  usually  makes  impossible  the  use  of  the  vot- 
ing power  in  a  manner  that  reflects  purely  personal 
or  factional  designs. 

Another  prevalent  doubt  as  to  the  propriety  of  the 
voting  trust  has  been  based  on  the  well-worn  doctrine 


VOTING  TRUSTS  33 

of  ''public  policy."  It  seems  to  have  been  assumed 
that  a  device  at  once  so  novel  and  so  effective  must  be 
essentially  iniquitous,  and  that  such  a  trust  is  either 
wholly  void  or  unenforceable  on  the  ill  defined  ground 
of  supposed  repugnance  to  public  policy,  or,  otherwise 
expressed,  the  policy  of  the  law.  When  analyzed,  these 
objections  appear  to  be  the  expression  of  a  conclusion 
unencumbered  by  reasoning,  or,  if  embodied  in  legal  ar- 
gument, they  are  most  commonly  based  on  certain  in- 
applicable theories.  Thus,  it  has  been  objected  that 
such  a  trust  unduly  suspends  the  power  of  alienation, 
an  objection  which  is  sufficiently  answered  by  the  sug- 
gestion that  in  practically  every  typical  instance  there 
has  been  no  moment  at  which  a  complete  conveyance 
of  the  shares,  directly  or  indirectly,  might  not  be  legally 
effected.  It  has  also  been  objected  that  the  separation 
of  the  voting  power  from  the  ownership  of  the  stock 
was  in  itself  illegal,  for  some  dimly  stated  reason,  whereas 
in  fact  the  voting  power  in  the  normal  case  continues 
to  be  attached  to  the  legal  ownership.  It  has  further, 
for  instance,  been  objected  that  the  trust  is  an  attempt 
to  create  a  proxy  for  a  term  usually  prohibited  by  statute, 
whereas  the  agreement  does  not  constitute  a  proxy  but 
evidences  a  change  of  legal  title.  Ordinarily,  in  other 
words,  the  conveyance  is  an  absolute  transfer,  subject 
to  certain  agreements  on  the  part  of  trustees,  and  not 
necessarily  inconsistent  with  any  type  of  public  pohcy 
recognized  by  the  law. 

Adverse  comments  upon  voting  trusts  are  also  based 
on  a  supposed  analogy  between  a  public,  or  political, 


34  THE  SIGNIFICANCE  OF 

corporate  body  and  a  private  corporation,  and  an  ap- 
plication to  the  latter  of  the  rule  of  the  former  that  the 
majority  should  control.  The  next  step  is  the  sugges- 
tion that  the  voting  trust  prevents  control  by  a  majority 
and  is  inconsistent  with  democratic  principles.  A  similar 
opinion  has  been  expressed  in  the  following  terms:  ''The 
institution  of  the  private  corporation  has  been  one  of 
the  great  factors  in  the  advance  of  modem  society. 
It  cannot  exist  without  adherence  to  the  principle  of 
majority  rule.  But  the  majority  must  come  honestly 
by  their  power,  they  must  use  it  without  injustice;  and 
the  majority  in  power  must,  at  least  once  a  year,  be 
the  majority  in  interest"  (Simeon  E.  Baldwin,  1  Yale 
Law  Journal,  15).  Democracy,  however,  is  not  inherent 
in  corporate  organization,  and  may  always  be  destroyed 
legally,  as  may  a  majority  of  individuals  be  nulhfied 
legally,  by  sufficient  purchases  in  a  single  interest.  In- 
deed, also,  there  "is  nothing  in  the  law  to  prevent  the 
owners  of  a  majority  of  the  stock  from  giving  proxies 
to  the  same  person"  {Vermer  v.  Chicago  City  Railway 
Co.,  258  111.  523;  1913).  In  many  early  English  corpora- 
tions, as  also  in  some  modern  instances,  the  aim  was  to 
place  control  with  a  majority  of  individuals  rather  than 
with  a  majority  of  shares  by  arbitrarily  providing  that 
an  individual  might  cast  only  a  specified  maximum 
of  votes  regardless  of  how  many  shares  he  might  own; 
and  it  is  interesting  to  note  that  one  writer  suggests 
a  return  to  this  abandoned  system.  "'One  vote  per 
share'  has  a  specious  ring  of  fairness,  but  it  is  imdemo- 
cratic.  .  .  .    Plural  voting  in  moderation  can  be  justified, 


VOTING  TRUSTS  35 

but  this  is  plural  voting  gone  mad"  (The  Economist, 
77;  1135).  The  attempt,  however,  to  model  the  meet- 
ings of  a  business  corporation  on  those  of  a  membership 
corporation  or  of  the  general  courts  of  the  old  colonizing 
companies  has  disappeared  in  practice  as  well  as  in 
law,  and  has  left  the  share  and  not  the  individual  as 
the  unit  of  membership,  and  the  majority  of  shares 
rather  than  the  majority  of  members  the  final  authority 
in  the  modern  business  corporation.  The  "majority 
of  the  stockholders"  means  a  majority  in  interest  and 
not  a  majority  in  number  only  {Bank  of  Los  Banos  v. 
Jordan,  167  Cal.  327;  1914);  or,  as  earlier  stated:  ''It 
is  the  law  of  joint  stock  corporations  that  a  majority 
of  the  stockholders  in  interest  shall  control  in  the  elec- 
tion of  the  officers  of  a  company,  and  its  management" 
(People  V.  Albany  and  Susquehanna  R.  R.  Co.,  55  Barb. 
334,  368;  1869). 

This  review  of  the  more  obvious  features,  and  of  some 
characteristic  expressions,  incident  to  the  history  of 
the  voting  trust  may  serve  also  as  a  statement  of  the 
problems  which  its  use  has  presented.  The  essentia) 
features,  both  of  fact  and  of  law,  which  have  been  thus 
briefly  suggested  will  be  considered  in  some  detail  in 
the  following  discussion,  not  so  much  with  the  design 
of  either  condemning  or  justifying  the  device,  as  of 
making  plain  the  development  and  present  position  of 
the  voting  trust. 


36  THE  CONTENTS  OF 


II 

THE  CONTENTS  OF  VOTING  TRUSTS 

The  significance,  object  and  effect  of  voting  trusts, 
suggested  in  the  preceding  paragraphs,  will  appear  more 
clearly  from  an  examination  of  the  contents  of  typical 
voting  trust  agreements,  and  especially  of  the  provisions 
concerning  the  powers  and  obligations  of  voting  trus- 
tees, the  limitations  upon  the  exercise  of  those  powers, 
and  the  dissolution  of  such  trusts. 

As  regards  the  corporation,  the  voting  trustees  are 
the  owners  of  the  stock  registered  in  their  names,  and 
they  consequently  become  entitled  to  receive  dividends 
as  declared.  The  complement  of  this  appears  in  the 
agreement  on  the  part  of  the  trustees  to  pay  to  the 
holders  of  their  trust  certificates  such  amounts  as  may 
be  received  as  dividends  upon  the  stock  held  by  them 
in  trust.  This  usually  appears  only  in  the  form  of 
voting  trust  certificates  embodied  in  the  agreement, 
but  should  preferably  appear  also  in  the  covenants  of 
the  agreement  itself.  In  the  event  that  a  dividend 
is  paid  by  the  corporation,  the  voting  trustees,  as  stock- 
holders of  record,  receive  the  amount  called  for  by  the 
aggregate  number  of  shares  held  by  them,  and  this 
in  turn  they  distribute  proportionately  among  the 
holders  of  theii  trust  certificates.    As  a  matter  of  prac- 


VOTING  TRUSTS  37 

tice  this  process  may  be  simplified  by  the  fihng,  on  the 
part  of  the  trustees,  of  suitable  dividend  orders  and  by 
the  distribution  of  the  dividend  by  the  company  di- 
rectly among  the  holders  of  the  trust  certificates. 

Such  an  arrangement  was  incorporated  in  the  North- 
ern Pacific  voting  trust  with  respect  to  trust  certificates 
registered  in  Berlin,  registration  there  being  '^  treated 
as  the  registration  of  the  stock  therein  stated,"  and 
the  trustees  being  authorized  to  arrange  with  the  com- 
pany so  that  the  dividends  on  the  stock  represented 
by  such  trust  certificates  should  be  paid  directly  to 
the  holders  of  the  latter  as  registered  in  Berlin.  A 
similar  plan  was  followed  in  the  voting  trust  of  the 
Allis-Chalmers  Manufacturing  Company,  the  company 
agreeing  to  pay  dividends,  on  request  of  the  trustees, 
directly  to  the  registered  holders  of  trust  certificates. 
In  the  case  of  the  Maxwell  Motor  Company,  however, 
the  voting  trustees  simply  agreed  to  pay  the  amount 
of  dividends,  as  received,  forthwith  to  the  Guaranty 
Trust  Company,  their  agent,  for  distribution  among 
the  certificate  holders  as  registered  on  the  books  of  the 
trust  company. 

It  is  obvious  that  if  the  voting  trust  were  created 
under  conditions  allowing  a  stockholder  to  retain  his 
stock  instead  of  exchanging  it  for  trust  certificates, 
the  practical  position,  as  to  dividends,  of  the  non- 
depositing  stockholder  would  be  unchanged.  If  a  divi- 
dend were  declared,  he  would  in  such  case  receive  it 
directly  from  the  corporation  instead  of  through  the 
voting  trustees,  and  he  could  also  exercise  the  futile 

47680 


38  THE  CONTENTS  OF 

power  of  voting  on  his  shares  of  stock  at  meetings  of 
stockholders. 

The  full  amount  received  by  the  trustees  as  dividends 
may  not  always  be  distributed,  as,  for  instance,  it  has 
infrequently  been  provided  that  the  trustees  might 
withhold  the  amount  of  their  necessary  expenses  (Secu- 
rity Life  and  Annuity)  or  even  an  amount  both  for 
their  expenses  and  for  their  proper  compensation 
(Northern  Pacific,  1893;  Bankers  Trust;  International 
Agricultural  Corporation).  The  Standard  Oil  trust 
agreement  fixed  a  liberal  maximum  within  which  the 
trustees  could  determine  their  own  salaries,  which  were 
payable  out  of  the  trust  fund.  In  the  voting  trust 
of  the  Allis-Chalmers  Manufacturing  Company  it  was 
properly  agreed,  as  the  company  was  a  party  to  the 
agreement,  that  the  expenses  of  the  trustees,  as  for 
counsel,  agent  and  registrar,  should  be  paid  by  the 
company.  The  trustees,  in  this  regard,  effaced  them- 
selves by  the  following  unusual  provision:  ''The  voting 
trustees  will  make  no  charge  for  their  services  as  such." 
In  the  case  of  the  Philadelphia  Rapid  Transit  Company, 
the  company  being  a  party  to  the  agreement  and  ap- 
parently only  for  this  purpose,  it  was  provided  that  the 
company  should  pay  the  expenses  of  the  agent,  registrar 
and  voting  trustees  and  also  "reasonable  compensation 
for  their  services."  This  detail  was  made  specific  in 
the  Chicago  Great  Western  voting  trust  by  stating 
the  annual  compensation  which  was  to  be  paid  to  the 
voting  trustees  by  the  company,  although  the  company 
was  not  a  party  to  the  agreement.    The  Erie  plan  of  De- 


VOTING  TRUSTS  39 

cember  1,  1877,  contained  the  provision,  as  to  the  voting 
trust,  that  "the  expense  of  conducting  such  voting 
trust,  including  the  remuneration  of  the  voting  trustees, 
shall  be  borne  and  paid"  by  the  new  company.  The 
reorganization  plan  of  the  Omaha  Water  Company 
provided  for  a  voting  trust  and  also  that  the  ''expenses 
incurred  in  carrying  out  these  provisions  with  regard 
to  the  control  of  stock  are  to  be  borne  by  the  new 
company." 

Ordinarily  it  doubtless  happens  that  individual  vot- 
ing trustees  are  not  paid  for  their  services  as  such, 
although  if  also  members  of  the  reorganization  com- 
mittee they  may  receive  compensation  for  services  in 
that  capacity,  while  their  expenses,  as  for  the  charges 
of  a  depositary,  the  cost  of  preparing  the  trust  certifi- 
cates and  the  voting  trust  agreement  itself,  are  pro- 
vided for  either  by  a  reorganization  committee  or  by  the 
corporation  itself,  items  which  are  properly  charged 
against  the  corporation  only  when  specifically  assumed 
by  the  company  or  when  all  the  stock  is  trusteed. 
Most  voting  trust  agreements  are  silent  as  to  any 
method  of  supplying  funds  for  these  necessary  purposes, 
except  in  those  instances  in  which  a  trust  company 
serves  as  sole  voting  trustee. 

There  should  be  expressed  in  the  agreement  the 
obligation  of  the  trustees  to  issue  trust  certificates  for 
any  further  shares  of  stock  that  may  be  tendered  to 
them,  not  only  that  the  trust  agreement  may  be  equally 
for  the  benefit  of  all  stockholders  desiring  to  avail 
themselves  of  it,  and  may  comply  with  such  statutes 


40  THE  CONTENTS  OF 

as  those  of  New  York  and  Maryland,  but  also  to  meet 
the  case  of  the  issue  of  trust  certificates  with  respect 
to  additions  to  the  capital  stock  for  new  property  (as 
occurred  in  the  Chicago  Great  Western,  1913),  or  the 
case  of  the  issue  of  stock  by  way  of  a  stock  dividend 
(as  occurred  in  the  International  Harvester,  1910). 

Provision  should  also  be  made  to  cover  the  case  of  an 
offer  to  stockholders  of  an  issue  of  securities  or  new 
stock,  in  order  that  the  trustees  may  subscribe  for 
such  an  amount  of  stock  as  their  certificate  holders 
may  elect  to  take.  Such  increase  of  stock  within  the 
period  of  the  voting  trust  occurred,  for  instance,  in 
the  Erie,  Baltimore  and  Ohio,  American  Gas  and  Elec- 
tric Company,  International  Agricultural  Corporation, 
and  the  Denver  and  Salt  Lake.  In  such  a  case,  the 
voting  trustees  should  be  empowered,  if  provided  with 
funds  by  their  certificate  holders,  to  purchase  such  stock, 
or  to  sell  the  subscription  rights  for  the  benefit  of  those 
not  concurring  in  such  purchase.  Such  a  contingency 
is  indeed  rarely  anticipated  by  the  terms  of  a  voting 
trust,  although  in  that  of  the  Allis-Chalmers  Manufac- 
turing Company  it  was  agreed  that,  in  the  event  of 
the  offer  of  new  stock,  a  trust  certificate  holder  might, 
at  least  two  days  prior  to  the  last  day  for  effecting 
subscription,  deliver  to  the  trustees  funds  and  a  suitable 
request,  and  the  trustees  would  thereupon  make  the 
subscription  and  in  due  course  issue  a  trust  certificate 
with  respect  to  the  stock  so  taken  (c/.  Guaranty  Trust; 
Richmond  Radiator). 

Offers  of  notes  by  the  American  Power  and  Light  and 


VOTING  TRUSTS  41 

of  convertible  debentures  and  voting  trust  certificates 
for  new  common  stock  by  the  Baltimore  and  Ohio  were 
not  made  to  the  stockholders,  however,  but  directly 
to  the  holders  of  trust  certificates,  a  method  properly 
available  when  formally  approved,  as  by  the  certificate 
holders  authorizing  the  voting  trustees  to  vote  as  stock- 
holders to  approve  an  offer  of  bonds  by  the  company 
directly  to  the  trust  certificate  holders  themselves  (Sea- 
board Air  Line,  1906).  The  trustees  as  well  should 
specifically  agree  to  issue  new  trust  certificates,  in  ex- 
change for  those  surrendered,  at  any  time  during  the  con- 
tinuance of  the  trust,  thus  giving  to  the  trust  certificates 
the  same  degree  of  transferability  as  stock  certificates 
would  ordinarily  have;  a  detail  which  commonly  is 
provided  for  only  by  an  ordinary  recital  in  the  certif- 
icates as  to  the  fact  and  method  of  transferability. 

The  trustees  ordinarily  agree  that  in  voting  the 
stock  held  by  them  they  ''will  exercise  their  best  judg- 
ment from  time  to  time  to  select  suitable  directors, 
to  the  end  that  the  affairs  of  the  company  shall  be 
properly  managed,  and  in  voting  on  other  matters 
which  may  come  before  them  at  any  stockholders' 
meeting  will  exercise  like  judgment"  (Erie;  Northern 
Pacific;  Southern;  Bankers  Trust).  This  recital  is 
sometimes  limited,  as  by  the  recital  "in  accordance 
with  the  purposes  first  above  set  forth"  (Reading; 
Baltimore  and  Ohio).  The  voting  power  in  this  particu- 
lar is  sometimes  subject  to  control  by  others  than  the 
trustees,  either  by  the  holders  of  the  trust  certificates 
(Central  Fuel  Oil)  or  by  the  holders  of  other  securities 


42  THE  CONTENTS  OF 

for  whose  benefit  really  the  trust  agreement  may  have 
been  created. 

In  the  case  of  the  Atlantic  and  Pacific  (1880)  while 
the  voting  trustees  nominally  had  the  right  to  elect 
the  board  of  thirteen  directors,  it  was  provided  that 
they  should  elect  six  directors  nominated  by  the  Atchi- 
son, Topeka  and  Santa  Fe  and  six  directors  nominated 
by  the  St.  Louis  and  San  Francisco,  and  should  them- 
selves actually  choose  the  thirteenth  director  only  if  the 
two  roads  interested  could  not  agree  on  a  nominee. 
The  plan  of  the  Hudson  and  Manhattan  Railway  (1913) 
provided  that  as  long  as  five  per  cent,  had  not  been 
paid  in  any  preceding  year  on  all  adjustment  income 
bonds  the  voting  trustees  should  elect  as  directors 
those  approved  or  nominated  by  a  meeting  of  the 
holders  of  the  adjustment  income  bonds  until  one  less 
than  a  majority  of  the  board  should  be  elected  as  so 
approved.  In  the  plan  of  the  People's  Water  Company 
the  voting  trustee  was  required  to  elect  as  the  nine 
directors,  four  nominated  by  bondholders,  four  nomi- 
nated by  those  having  the  beneficial  interest  in  the 
stock,  and  a  ninth  director  named  by  the  eight  thus 
selected.  Thus,  under  the  readjustment  plan  of  the 
Philadelphia  and  Reading  (October  1,  1894),  which 
however  was  later  abandoned,  it  was  proposed  that 
the  stock  should  be  held  by  the  Central  Trust  Company 
and  should  be  voted  by  it,  in  electing  a  president  and 
half  of  the  board  of  managers,  as  directed  by  the  holders 
of  the  general  mortgage  bonds,  and  in  electing  the  other 
half  of  the  board  as  directed  by  the  holders  of  the 


VOTING  TRUSTS  43 

"assented"  stock  trust  certificates,  until  "all  the  cou- 
pons and  interest  purchased  under  this  plan  shall  be 
paid  and  cancelled  by  the  Railroad  Company";  and 
thereafter,  until  the  maturity  and  discharge  of  the 
general  mortgage,  it  should  be  voted  with  respect  to 
one-third  of  the  board  as  directed  by  the  holders  of  the 
general  mortgage  bonds,  with  respect  to  one-third  of  the 
board  as  directed  by  the  holders  of  income  bonds,  and 
with  respect  to  one-third  of  the  board  and  the  president 
as  directed  by  the  holders  of  "assented"  stock  trust 
certificates. 

In  the  plan  of  the  creditors'  committee  of  the  Central 
Iron  and  Steel  Company  (May  1,  1915)  it  was  provided 
that  during  the  trust,  which  was  to  endure  until  all  the 
debentures  and  bonds  of  the  new  company  were  paid, 
of  the  nine  directors  elected  by  the  voting  trustees  the 
bondholders,  the  creditors  and  the  stockholders  should 
each  nominate  one-third;  and  that  after  the  debentures 
had  been  paid  the  bondholders  should  be  entitled  to 
nominate  six  directors. 

Aside  from  the  election  of  the  directors,  the  actual 
voting  power  of  the  trustees,  while  of  course  subject 
to  the  terms  of  the  stock  held  by  them,  may  be  limited 
also  by  the  terms  of  the  voting  trust  agreement  itself. 
In  the  early  instance  of  the  South  CaroHna  Railroad 
it  was  proposed  that  the  voting  trustees  be  subject  to 
instructions  by  the  holders  of  the  second  mortgage 
bonds.  So  in  the  case  of  the  Mobile  and  Ohio  the 
trusteed  stock  was  voted  under  the  control  of  security 
holders  {Mobile  &  Ohio  R.  R.  Co.  v.  Nicholas,  98  Ala.  92; 


44  THE  CONTENTS  OF 

1892).  In  the  case  of  the  First  Security  Company  the 
trustees  were  subject  to  directions  by  two-thirds  of 
the  certificate  holders.  Again,  in  the  case  of  the  Oregon 
Railroad  and  Navigation  (1896)  the  trustees  were,  as  to 
certain  questions,  subject  to  instructions  from  a  majority 
of  all  certificate  holders,  and  as  to  other  questions  from 
a  majority  of  each  class  of  certificate  holders.  An  ex- 
treme limit,ation  was  expressed  in  the  case  of  the  Inter- 
national Nickel  (1911,  1912),  in  which  the  voting 
trustees  had  power  to  vote  on  the  election  of  directors, 
on  approving  the  acts  of  the  directors,  on  amending 
the  by-laws,  and  on  routine  matters;  but  before  voting 
on  other  matters  they  were  obliged  to  secure  instruc- 
tions by  letter  from  the  registered  holders  of  their 
certificates  and  vote  on  such  matters  ''for  each  holder 
to  the  amount  of  his  holdings  as  directed  by  him." 
Under  the  trust  of  the  Bath  Portland  Cement  Company 
the  voting  trustee,  a  trust  company,  was  required  to 
vote  as  instructed  in  writing  by  the  majority  of  a  com- 
mittee of  three  appointed  in  writing  by  the  holders  of  a 
majority  of  the  outstanding  trust  certificates.  Natu- 
rally, as  in  this  instance,  it  is  customary  when  a  trust 
company  is  the  sole  voting  trustee  that  the  certificate 
holders  are  given  a  voice  in  controlling  the  choice  of 
nominees  for  the  board  of  directors,  as  well  as  in  other 
matters. 

The  voting  power  of  the  trustees  on  certain  subjects 
has  often  been  specifically  restricted,  the  trust  agree- 
ment, to  be  sure,  in  some  cases  only  adopting  the  terms 
of  the  company's  certificate  of  incorporation,  but  even 


VOTING  TRUSTS  45 

in  those  cases  restoring  to  the  certificate  holders  certain 
rights  which  otherwise  might  be  exercised  absolutely 
by  the  voting  trustees.  One  of  the  most  substantial 
of  these  limitations  is  the  provision  under  which  the 
trustees  agree  not  to  vote  in  favor  of  the  creation  of 
superior  rights,  in  the  form  either  of  additional  pre- 
ferred stock  or  of  a  new  mortgage,  without  the  express 
consent  of  the  holders  of  a  certain  proportion  of  the 
outstanding  trust  certificates.  This  restriction  appears 
not  to  have  been  common  in  the  earlier  voting  trust 
agreements,  and  was  not  included  even  in  that  of  the 
Southern  Railway  (1894),  a  circumstance  which  gave 
occasion  for  a  practical  illustration  of  the  fact  that 
voting  trustees  do  not  regard  their  position  as  an  oppor- 
tunity for  power  rather  than  an  obligation  of  service. 
When,  in  1906,  it  was  proposed  that  the  Southern 
Railway  should  place  on  its  property  a  new  mortgage  of 
$200,000,000,  the  president  of  the  company  addressed 
to  the  voting  trustees  as  holders  of  the  control  of  the 
stock  a  formal  letter  approving  the  plan.  The  voting 
trustees,  instead  of  proceeding  to  exercise  their  rights, 
indicated  their  policy  by  the  following  reply:  ''In  a 
matter  of  such  importance  we  should  prefer  to  submit 
the  proposition  for  the  approval  of  the  holders  of  our 
stock  trust  certificates  before  taking  final  action  thereon, 
and  this  we  shall  proceed  to  do  at  once  in  order  that 
we  may  be  prepared  when  necessary  to  take  such  action 
in  the  premises  as  may  be  legally  requested  of  us  as 
stockholders."  And  yet  it  has  been  said  that  under 
this    voting    trust    ''the    Morgan-Baker    alliance    have 


46  THE  CONTENTS  OF 

absolutely  controlled  the  property  for  twenty  years, 
to  the  exclusion  of  the  stockholders.  .  .  ."  (Samuel 
Untermyer,  A  Legislative  Program,  1914,  p.  20.) 

This  omission  was  supplied  in  the  Reading  reorgani- 
zation plan  (1895),  and  accordingly  the  Reading  voting 
trust  agreement  (1897)  provided  that  the  voting  trus- 
tees "will  not,  nor  will  any  of  them,  consent  that  (1) 
any  mortgage,  additional  to  the  mortgage  of  $135,000,000 
heretofore  authorized,  shall  hereafter  be  put  upon  the 
property  formerly  constituting  the  system  of  the  Phila- 
delphia &  Reading  Railroad  Co.,  and  Philadelphia  & 
Reading  Coal  &  Iron  Co.,  or  that  (2)  the  amount  of 
the  first  preferred  stock  of  the  Reading  Company  be 
increased,  except  after  they  shall  in  each  instance  have 
obtained  the  consent  of  the  holders  of  a  majority  of 
the  whole  amount  of  each  class  of  preferred  stock  trust 
certificates  given  at  a  meeting  of  such  certificate  hold- 
ers called  for  that  purpose,  and  also  the  consent  of  the 
holders  of  a  majority  of  such  part  of  the  common 
stock  trust  certificates  as  shall  be  represented  at  such 
meeting;  the  holders  of  each  class  of  stock  trust  certifi- 
cates voting  separately;  or  that  (3)  the  amount  of  the 
second  preferred  stock  be  increased  except  with  like 
consent  by  the  holders  of  a  majority  of  the  whole 
amount  of  second  preferred  stock  trust  certificates 
given  at  a  meeting  of  the  holders  of  second  preferred 
stock  trust  certificates  called  for  that  purpose,  and 
also  with  like  consent  of  the  holders  of  a  majority 
of  such  part  of  the  common  stock  trust  certificates 
as  shall  be  represented  at  such  meeting;  the  holders 


VOTING  TRUSTS  47 

of  each  class  of  stock  trust  certificates  voting  sepa- 
rately." 

A  similar  provision  had  also  been  included  in  the 
voting  trust  under  the  reorganization  plan  of  the 
Northern  Pacific  (1896).  This  led,  in  1897,  to  the  fol- 
lowing comment:  "One  improvement  we  note  in  the 
more  recent  agreements  like  the  Reading.  It  is  with 
reference  to  the  making  of  new  mortgages  or  to  the 
increasing  of  the  preferred  stock  issues,  the  same  rights 
being  now  reserved  to  the  holders  of  the  voting  trust 
certificates  as  would  belong  to  them  as  stockholders 
were  the  shares  instead  of  the  certificates  outstanding. 
Thus  in  the  case  of  the  Northern  Pacific  the  voting 
trustees  are  limited  in  their  powers  to  the  extent  that 
they  cannot  authorize  a  new  mortgage  or  increase  the 
preferred  stock  without  first  obtaining  the  consent  of  a 
majority  of  the  whole  amount  of  the  voting  trust  certif- 
icates representing  the  preferred  stock  and  a  majority 
of  such  amount  of  the  voting  trust  certificates  repre- 
senting the  common  stock  as  shall  be  represented  at 
the  meeting  called  to  consider  the  question.  We  do 
not  imagine  that  the  voting  trustees,  in  the  absence 
of  such  a  provision,  would  think  of  performing  either 
of  these  acts,  but  it  is  obviously  proper  that  the  rights 
of  the  stockholders  should  be  so  safeguarded"  {Com.  & 
Fin.  Chron.,  64;  826). 

Following  the  reorganization  of  the  American  Bicycle 
Company,  the  voting  trust  (of  the  Pope  Manufacturing 
Company)  provided  that  the  "voting  trustees  will 
not,  however,  during  the  pendency  of  this  agreement, 


48  THE  CONTENTS  OF 

vote  in  respect  of  the  shares  of  the  capital  stock  of 
said  Pope  Manufacturing  Company  held  by  them  to 
authorize  any  mortgage  upon  the  property  acquired 
under  said  plan  and  agreement  of  reorganization  dated 
December  15,  1902,  or  any  part  thereof,  nor  to  author- 
ize any  increase  in  the  amount  of  first  preferred  stock 
or  second  preferred  stock  of  said  Pope  Manufacturing 
Company  except  with  the  consent  of  the  holders  of 
three-fourths  in  amount  of  the  first  preferred  stock 
trust  certificates,  nor  to  authorize  any  increase  in  the 
amount  of  second  preferred  stock  of  said  Pope  Manu- 
facturing Company  except  with  the  consent  of  the 
holders  of  two-thirds  in  amount  of  second  preferred 
stock  trust  certificates  and  two-thirds  in  amount  of  the 
common  stock  trust  certificates  of  said  Pope  Manufactur- 
ing Company  given  at  a  meeting  called  by  the  voting 
trustees  for  that  purpose,  for  which  notice  shall  be 
given  in  accordance  with  the  provisions  of  Article  Tenth 
hereof,  or  by  the  assent  or  approval  in  writing  of  such 
holders  of  voting  trust  certificates  filed  with  the  Cen- 
tral Trust  Company  of  New  York." 

This  voting  trust  was  terminable  on  February  1, 
1908,  before  which  time  the  concern  became  involved, 
and  the  1906  reorganization  plan  of  the  Pope  Manu- 
facturing Company  contained  the  following:  "Provi- 
sion shall  be  made  that  during  the  continuance  of  the 
aforesaid  voting  trust  (1)  no  mortgage  shall  be  put 
upon  the  property  of  the  new  company  or  any  part 
thereof  (other  than  the  mortgage  of  deed  of  trust 
herein    referred    to)    except    with    the    consent    of    the 


VOTING  TRUSTS  49 

holders  of  two-thirds  in  the  amount  of  the  certificates 
representing  the  preferred  stock  and  the  holders  of 
two-thirds  in  amount  of  the  certificates  representing 
common  stock;  (2)  the  amount  of  the  preferred  stock 
shall  not  be  increased  except  with  the  consent  of  the 
holders  of  three-fourths  in  amount  of  the  certificates 
representing  preferred  stock  and  the  holders  of  two- 
thirds  in  amount  of  certificates  representing  common 
stock;  and  (3)  the  amount  of  the  common  stock  will 
not  be  increased  except  with  the  consent  of  the  holders 
of  two-thirds  in  amount  of  the  certificates  representing 
preferred  stock  and  the  holders  of  two-thirds  in  amount 
of  certificates  representing  common  stock." 

The  two  instances  last  cited  indicate  that  the  propor- 
tion coupled  with  such  restriction  may  have  some 
significance,  and  that,  aside  from  any  statutory  re- 
quirements, the  proportion  used  may  vary  with  some 
relation  to  the  fact  that  the  organizers  or  the  control- 
ling interests  expect  to  be  either  on  the  defensive  or, 
inaptly  stated,  on  the  offensive.  If  the  former,  and 
they  wish  merely  to  be  in  a  position  with  as  small  an 
investment  as  possible  to  keep  conditions  as  at  the 
outset  and  prevent  any  increase  of  securities,  they 
will  naturally  introduce  the  requirement  of  consent 
by  three-fourths.  On  the  other  hand,  if  they  wish  to 
be.  in  a  position  readily  to  take  affirmative  action  on 
the  lines  indicated,  they  will  obviously  seek  to  depend 
on  the  action  only  of  a  majority. 

Similarly,  the  reorganization  plan  of  the  Southern 
Iron  and  Steel   (1911)   provided  that  there  should  be 


50  THE  CONTENTS  OF 

no  new  mortgage  or  preferred  stock  except  with  the 
consent  of  the  holders  of  a  majority  of  certificates 
representing  each  class  of  stock.  The  Allis-Chahners 
voting  trust  provided  that  there  should  be  no  mortgage 
created  so  long  as  any  preferred  stock  remained  out- 
standing except  with  the  consent  of  holders  of  eighty 
per  cent,  of  the  preferred  trust  certificates  as  well  as 
of  eighty  per  cent,  of  the  preferred  stock.  The  United 
States  Leather  plan  required  the  consent  of  eighty  per 
cent.;  the  McCrum-Howell  plan  called  for  the  consent 
of  seventy-five  per  cent.,  and  in  the  Chicago  Great 
Western  trust  the  consent  of  certificates  representing  a 
majority  of  preferred  stock  was  required  for  the  au- 
thorization of  any  new  mortgage.  The  United  States 
Motor  plan  (later  the  Maxwell  Motor  Co.)  required  for  a 
mortgage  or  for  new  first  preferred  stock  the  consent 
of  holders  of  trust  certificates  representing  three-fourths 
of  the  first  preferred  stock  and  a  majority  of  second  pre- 
ferred and  common  stock,  and  for  new  second  preferred 
stock  the  consent  of  the  holders  of  trust  certificates 
representing  a  majority  of  the  second  preferred  and 
common  stock;  but  the  trustees  were  allowed  to  vote, 
without  the  concurrence  of  certificate  holders,  for  any 
increase  of  securities  provided  for  in  the  reorganization 
plan  of  October  10,  1912.  In  the  case  of  the  Colorado 
and  Southern  any  mortgage  beyond  the  new  first  mort- 
gage and  any  additional  first  preferred  stock  could  be 
created  only  with  the  consent  of  the  holders  of  certifi- 
cates representing  a  majority  of  the  first  preferred  stock. 
The  voting  trust  of  the  International  Mercantile  Marine 


VOTING  TRUSTS  51 

provided  that  there  should  be  neither  any  additional 
mortgage  nor  any  increase  of  stock  except  with  the 
consent  of  the  holders  of  two-thirds  of  the  outstanding 
preferred  trust  certificates. 

Without  here  entering  into  unnecessary  refinement,  it 
is  to  be  mentioned  that  in  some  cases  such  requirement, 
of  two-thirds  for  instance,  is  so  stated  as  to  denote  two- 
thirds  of  the  particular  class  of  trust  certificates  out- 
standing while  in  other  cases  it  denotes  the  holders  of 
trust  certificates  representing  two-thirds  of  the  particular 
class  of  stock  outstanding,  recitals  which  are  not  iden- 
tical unless  all  such  stock  is  held  by  the  voting  trus- 
tees. 

In  a  number  of  trusts  the  trustees  have  been  free  to 
vote  for  an  increase  of  stock  without  any  consent  from 
their  certificate  holders,  the  rights  of  the  latter  to 
share  in  the  increase  being  protected.  The  instances  de- 
scribed will  serve  to  illustrate  the  general  character  of  these 
limitations,  the  variety  of  which,  in  the  details  appli- 
cable to  a  particular  situation,  is  very  great. 

The  practical  result  of  such  restrictions  is  that  the 
certificate  holders,  on  the  termination  of  the  trust, 
if  such  requisite  consents  have  not  been  given,  receive 
certificates  of  stock  bearing  the  same  relation  to  the 
property  and  to  mortgage  liens  upon  it  as  did  their 
stock  when  originally  transferred  to  the  voting  trustees. 
The  effect  of  the  provision  is  to  protect  the  substantial 
property  rights  of  the  certificate  holders,  and  is  there- 
fore doubtless  justifiable,  although  it  involves  a  quali- 
'fication  of  the  complete  exercise  by  the  trustees  of  the 


52  THE  CONTENTS  OF 

rights  of  legal  owners.  Such  a  qualification,  however, 
by  way  of  contract  or  declaration  of  trust  is  not  deemed 
to  be  inconsistent  with  the  rights  of  the  trustees  as 
legal  owners  or  obnoxious  to  public  policy. 

Provision  is  usually  made  for  the  termination  of  the 
trust  upon  a  niunber  of  contingencies.  Thus,  as  to 
the  more  typical  methods: 

(1)  It  is  commonly  provided  that  the  trust  shall 
end  on  a  certain  date  or  not  later  than  a  specified  date. 

(2)  It  is  quite  as  commonly  provided,  in  addition, 
that  the  trustees  may  terminate  the  trust  at  any  time 
in  their  discretion. 

(3)  It  is  quite  frequently  provided  that  the  trust 
shall  terminate  when,  and  often  after  a  given  date,  a 
certain  event  has  happened,  such  as  the  payment  of 
certain  dividends  or  of  certain  interest  charges. 

(4)  It  is  sometimes  provided  that  the  trust  may  be 
terminated,  by  sale  or  by  distribution,  by  the  trustees, 
either  with  or  without  the  concurrence  of  the  holders 
of  a  certain  proportion  of  the  voting  trust  certificates. 

It  is  of  course  possible  that  all  of  these  events  of 
termination  may  be  included  in  one  instrument,  but 
that  rarely  occurs,  while  other  conditions  of  termina- 
tion, as  illustrated  below,  are  sometimes  included. 
Naturally  it  may  be  assumed  that  the  larger  number 
of  voting  trusts  have  terminated  by  limitation  on  the 
date  fixed  in  the  agreement  (e.  g.,  International  Harves- 
ter; International  Agricultural  Corporation;  Metropoli- 
tan West  Side  Elevated;  General  Asphalt;  Toledo, 
St.  Louis  and  Western;  United  Railways  of  St.  Louis; 


VOTING  TRUSTS  53 

Chicago  Great  Western;  Pittsburg  and  Western;  Cuya- 
hoga Telephone;  Wisconsin  Central  Railway). 

The  discretionary  power  of  termination  vested  in 
the  trustees  is  technically  desirable,  to  avoid  any  claim 
of  illegal  restraint  on  the  power  of  alienation,  and  it 
is  also  of  practical  importance,  although  the  exercise 
of  this  power  seems  to  have  been  comparatively  infre- 
quent (e.  g.,  Bankers  Trust;  Guaranty  Trust;  Colorado 
and  Southern;  Michigan  State  Telephone;  Northern 
Colorado  Power;  Northern  Pacific;  Southern  Railway; 
International  Mercantile  Marine).  Seldom  does  a 
discretionary  termination  occur  before  the  object  of  a 
voting  trust  seems  to  have  been  accomplished,  as 
when  the  National  Railroad  of  Mexico  voting  trust 
of  1902  was  dissolved  in  1903,  apparently  as  an  inci- 
dent to  new  arrangements  with  the  Mexican  Govern- 
ment, and  when  that  of  the  International  Mercantile 
Marine  was  dissolved  in  1915,  after  the  company  de- 
faulted in  the  payment  due  October  1,  1914,  on  its 
bonds.  In  the  latter  instance  the  voting  trustees 
"deemed  it  proper  ...  to  dissolve  the  voting  trust 
so  that  the  company's  shareholders  may  be  in  a  position 
to  act  independently  as  they  may  deem  best  for  their 
own  interests  in  case  a  readjustment  of  the  company's 
finances  and  capitalization  shall  be  necessary." 

.  The  discretionary  power  of  termination  under  the 
Chicago  Great  Western  voting  trust  was  to  be  exercised 
on  sixty  days'  notice  and  was  subject  to  the  unusual 
limitation  that  it  should  be  "with  the  concurrence  of 
the  Reorganization  Managers."    The  trustees  have  also, 


54  THE  CONTENTS  OF 

in  a  ten-year  trust,  been  empowered  to  dissolve  in  part 
or  in  whole  at  any  time  by  unanimous  action,  or  to 
dissolve  in  whole  after  seven  years  by  the  act  of  the 
majority  (National  Asphalt),  while  in  the  case  of  the 
Midland  Valley  the  trustees  were  given  the  power  of 
terminating  after  May  1,  1918,  a  trust  which  might  con- 
tinue until  January  1,  1924. 

Upon  such  a  termination,  the  voting  trustees  formally 
adopt  a  resolution  of  termination  or  dissolution,  a  form 
of  notice  of  such  action,  and  a  form  of  call  for  the  sur- 
render of  the  outstanding  trust  certificates  in  exchange 
for  stock  certificates.  When  the  Northern  Pacific  trust 
was  thus  terminated,  by  the  discretionary  action  of  the 
trustees,  prior  to  the  date  fixed  in  the  agreement,  the 
trustees  also  reported  quite  fully  to  their  certificate  hold- 
ers (November  12,  1900),  in  part  as  follows:  ''Pursuant 
to  the  plan  for  the  reorganization  of  the  Northern  Pa- 
cific Railroad  Co.,  dated  March  16, 1896,  and  'in  further- 
ance of  the  independent  reorganization  and  administra- 
tion of  the  property  and  to  promote  and  protect  the 
value  of  the  securities  of  the  new  company,'  Messrs. 
J.  P.  Morgan  &  Co.,  as  reorganization  managers,  de- 
Hvered  to  the  undersigned,  as  voting  trustees,  under  the 
terms  of  an  agreement  dated  December  1,  1896,  the 
common  and  preferred  capital  stocks  of  the  Northern 
Pacific  Railway  Co.,  for  which  our  trust  certificates  have 
been  issued  and  are  now  outstanding. 

"By  the  receipt  of  these  Northern  Pacific  shares 
the  voting  trustees  possessed  and  became  'entitled  to 
exercise  all  the  rights  of  every  name  and  nature,  in- 


VOTING  TRUSTS  55 

eluding  the  right  to  vote  in  respect  of  any  and  all 
such  stock.' 

"As  stockholders  of  record,  the  voting  trustees  have 
received  all  dividends  paid  upon  these  shares  and  have 
caused  the  same  to  be  distributed  as  received  to  the 
holders  of  the  trust  certificates. 

"In  voting  the  stock  held  by  them,  the  voting  trustees 
have  exercised  their  best  judgment,  from  time  to  time, 
in  the  selection  of  suitable  directors,  to  the  end  that 
the  affairs  of  the  company  should  be  properly  managed. 

"The  annual  reports  issued  and  distributed  by  order 
of  the  directors  during  the  past  four  years  to  the  holders 
of  the  trust  certificates  and  various  securities  of  the 
company  have  given  prompt  and  full  information  to 
all  parties  in  interest,  regarding  the  directors  and  officers 
selected,  and  the  management  thereby  secured  by  the 
voting  trustees  in  the  exercise  of  their  voting  power  and 
the  administration  of  their  trust. 

"Although  the  first  day  of  November,  1901,  was 
fixed  as  the  date  for  the  expiration  of  this  trust,  yet 
it  was  provided  that  at  any  time  the  voting  trustees 
might  call  upon  the  holders  of  the  stock  trust  certifi- 
cates to  exchange  them  for  certificates  of  capital  stock. 

"By  reason  of  the  evidence  of  financial  strength, 
conservative  management,  skillful  and  profitable  opera- 
tion, superior  physical  condition  of  the  property  and 
the  reasonable  prospect  of  continued  prosperity  of  the 
Northern  Pacific  Railway  Co.,  the  voting  trustees,  in 
the  exercise  of  their  discretion,  have  decided  to  now 
terminate  their  trust  and  to  distribute  on  January  1, 


56  THE  CONTENTS  OF 

1901,  the  shares  of  stock  they  hold  in  exchange  for 
their  outstanding  trust  certificates." 

This  step  was  commented  upon  at  the  time  in  the 
following  terms:  ''The  action  last  week  of  the  board 
of  directors  of  the  Northern  Pacific  Railway  Company 
in  placing  the  common  stock  on  a  four  per  cent,  divi- 
dend basis  has  been  followed  this  week  by  a  wholly 
unlooked  for  announcement  that  the  voting  trust  in 
the  shares  of  the  company  is  to  be  terminated.  .  .  . 
The  action  is  somewhat  unique.  Men  do  not  as  a 
rule  yield  up  power  readily,  for  there  is  a  certain  fas- 
cination in  the  exercise  of  it  that  makes  the  holder 
reluctant  to  divest  himself  of  it;  hence  the  fact  that  in 
this  instance  the  voting  trustees  of  their  own  volition 
part  with  the  control  of  this  important  railroad  prop- 
erty speaks  volumes  both  as  to  the  character  of  the 
men  themselves  and  of  the  wonderful  results  which 
have  been  accomplished  under  their  wise  care  and 
judgment  in  the  short  period  of  four  years  since  the 
new  company  was  constituted. 

"The  reorganization  of  the  Northern  Pacific,  as  is 
well  known,  was  the  work  of  J.  P.  Morgan  &  Co. 
Mr.  Morgan's  house  has  on  more  than  one  occasion 
in  the  history  of  the  road  come  to  its  rescue  on  critical 
occasions,  but  never  did  it  render  more  efficient  or  im- 
portant services  on  behalf  of  an  embarrassed  concern 
than  when,  in  the  thorough  and  drastic  manner  for 
which  the  house  is  famed,  it  undertook  to  place  this 
large  concern  on  its  feet.  ...  It  is  rather  noteworthy 
that  the  voting  trustees  appear  to  be  little  concerned 


VOTING  TRUSTS  67 

to  give  prominence  to  their  own  part  in  the  work. 
It  would  be  difficult  to  find  a  stronger  list  of  names 
than  that  comprising  the  voting  trust,  it  consisting 
of  J.  P.  Morgan  himself  and  of  August  Belmont,  Charles 
Lanier,  Johnston  Livingston  and  Dr.  Georg  von  Sie- 
mens; but  they  cite  the  facts  set  out  in  the  report 
simply  to  show  that  they  are  justified  in  the  step  they 
have  taken  in  handing  control  of  the  property  back 
to  the  shareholders — or  (to  use  their  own  language) 
to  furnish  convincing  proof  'that  the  purposes  of  our 
trusteeship  have  been  fulfilled  and  that  we  are  war- 
ranted in  now  dissolving  the  trust ' "  {Com.  &  Fin. 
Chron.,  71;  989).  Likewise  the  voting  trustees  of  the 
Southern  Railway  in  announcing  on  June  30,  1914, 
their  decision  to  terminate  the  trust,  reported  in  some 
detail  on  their  administration  and  set  forth  striking 
figures  showing  the  comparative  financial  condition  of 
the  property  at  the  beginning  and  near  the  close  of  the 
trust. 

The  dissolution  of  the  trust  on  the  occurrence  of  a 
specific  event  is  logically  the  ideal  process,  and  this 
happened,  for  instance,  in  the  cases  of  the  St.  Louis 
and  San  Francisco,  the  Erie  and  the  Reading,  upon 
the  payment  of  required  dividends.  The  Frisco  trust 
was  terminable  whenever,  after  five  years,  the  first 
preferred  stock  had  received  four  per  cent,  for  two 
consecutive  years,  a  result  which  was  reached  as  of 
July  1,  1901.  The  Erie  voting  trust  was  to  termi- 
nate whenever,  after  five  years,  the  first  preferred  had 
received    four   per    cent,  in  one    year,  which    occurred 


58  THE  CONTENTS  OF 

in  the  fiscal  year  1903-1904.  The  Reading  voting 
trust  was  to  terminate  whenever,  not  prior  to  Janu- 
ary 1,  1902,  four  per  cent,  had  been  paid  on  the  first 
preferred  stock  for  two  consecutive  years,  which  condi- 
tion was  met  by  the  payments  made  in  the  calendar 
years  1903  and  1904. 

The  result  of  what  was  naturally  deemed  a  successful 
voting  trust,  especially  in  a  system  earlier  productive 
of  so  much  litigation,  is  reflected  in  the  report  of  Presi- 
dent Underwood  of  the  Erie  for  the  year  1904,  while 
in  other  cases,  like  the  Reading  (October,  1904),  upon 
a  termination  of  a  trust,  statistics  have  been  published 
which  would  seem  eulogies  of  voting  trusts  although 
in  fact  the  voting  trustees  would  themselves  be  the 
last  to  decline  to  apportion  much  of  the  credit  to  the 
operating  officials. 

In  addition  to  similar  events  of  termination  already 
referred  to  (page  17)  may  be  mentioned  the  provisions 
for  termination  when  the  income  bonds  had  received 
five  per  cent,  for  three  consecutive  years  (Atchison, 
Topeka  and  Santa  Fe,  1894  plan),  when  the  first  mort- 
gage bonds  had  received  four  per  cent,  for  three  con- 
secutive years  (Colorado  Midland),  when  the  first  pre- 
ferred stock  had  received  five  per  cent,  in  one  year 
(Southern),  and  when  the  first  preferred  stock  had 
received  four  per  cent,  for  three  consecutive  years 
(Union  Pacific,  Denver  and  Gulf). 

With  respect  to  termination  upon  a  specified  event 
an  extreme  case  was  that  of  the  Omaha  Water  trust, 
which  was  to  continue  until  both  classes  of  preferred 


VOTING  TRUSTS  59 

stock  had  received  five  per  cent,  for  five  years. 
''Whether  the  five  consecutive  years  means  concurrently 
or  alternately"  the  voting  trustees  had  power  to  de- 
termine. While  the  court  held  that  the  question  before 
it  was  not  whether  the  parties  might  lawfully  make 
such  an  agreement,  but  whether  in  fact  they  had  made 
such,  it  nevertheless  said  ''These  provisions  have  the 
earmarks,  to  say  the  least,  of  an  intention  to  provide 
for  substantially  perpetual  control  on  the  part  of  the 
committee  and  their  successors  of  property  which 
the  committee  acquired  in  trust  for  the  bondholders" 
{United  Water  Works  Co.  v.  Omaha  Water  Co.,  164  N. 
Y.  41;  1900).  The  St.  Louis,  Kansas  City  and  Northern 
trust  was  intended  to  be  perpetual,  as  was  that  of  the 
Pittsburg  and  Lake  Erie,  a  detail  which  to-day,  aside 
from  the  serious  question  of  legality,  would  doubtless 
prevent  the  listing  of  the  trust  certificates  on  any  stock 
exchange  which  scrutinizes  new  issues  with  the  care 
shown  by  the  Committee  on  Stock  List  of  the  New  York 
Stock  Exchange. 

A  most  remote  event  of  termination  occurred  in  the 
case  of  the  Consumers'  Gas  Trust  (1887),  an  Indiana 
corporation  whose  articles  of  association  provided  that 
"the  entire  capital  stock  of  the  corporation  shall  be 
placed  under  the  control  of  the  board  of  five  trustees 
and  their  successors,  who  shall  be  stockholders  in  said 
Company,  which  said  board  of  trustees  shall  have  full, 
complete,  exclusive  and  irrevocable  power  during  the 
continuance  of  this  corporation  to  hold  said  stock  and 
to  vote  the  same  as  fully  and  completely  as  if  they 


60  THE  CONTENTS  OF 

were  the  owners  of  said  capital  stock,  to  elect  directors 
as  above  provided,  and  to  fill  any  vacancy  that  may 
occur  in  said  board  of  directors.  Said  entire  capital 
stock  shall  be  voted  as  a  unit,  and,  in  case  said  trustees 
shall  not  agree  as  to  how  said  stock  shall  be  voted, 
the  majority  of  them  shall  cast  the  vote  of  the  board. 
If  a  vacancy  should  occur  in  the  board  of  trustees  by 
death,  resignation,  removals  from  the  city  of  Indianap- 
olis, or  otherwise,  such  vacancy  shall  be  filled  by  the 
remaining  members  of  the  board;  and,  in  the  event 
of  the  failure  of  such  board  to  fill  such  vacancy  the 
Marion  circuit  court  shall,  upon  application  of  any 
stockholder,  after  said  trustees  shall  have  had  ten 
days'  notice  in  writing  of  such  application  and  shall 
have  in  the  meantime  failed  to  fill  such  vacancy,  ap- 
point some  competent  person  to  fill  the  same."  The 
articles  of  association  also  provided  for  the  issue  of 
trust  certificates,  and  these  as  issued  recognized  the 
right  of  the  trustees  to  hold  the  stock  "during  the 
continuance  of  the  Consumers'  Gas  Trust  Company 
as  a  corporation."  Litigation  over  this  extraordinary 
situation  {Consumers'  Gas  Trust  Co.  v.  Quinhy,  137  Fed. 
882;  1905)  had  to  do  not  with  the  legality  of  the  ar- 
rangement itself,  but  with  the  question  whether,  the 
company's  principal  authorized  business  having  ended 
with  the  exhaustion  of  its  supply  of  natural  gas,  the 
assets  of  the  concern  should  not  be  distributed  among 
the  certificate  holders. 

Such   inclusion   in   a   certificate   of   incorporation   of 
the   essential    facts   of   a   prospective    voting    trust   is 


VOTING  TRUSTS  61 

rather  an  inversion  of  logical  procedure  and  is  not  at 
all  common  (c/.  page  127).  An  early  instance  is  that 
of  the  New  York,  Lake  Erie  and  Western,  the  certifi- 
cate of  incorporation  of  which  (April  26,  1878)  not 
only  set  out  in  full  the  reorganization  plan  of  De- 
cember 14,  1877,  but  also  contained  the  following 
provision:  "In  accordance  with  the  provisions  of  a 
certain  plan  and  agreement,  which  is  hereinafter  in- 
serted, and  is  hereby  made  a  part  of  this  certificate, 
the  power  of  voting  in  respect  of  one-half  of  the  pre- 
ferred stock,  and  one-half  of  the  common  stock  to  be 
issued  by  this  corporation,  shall  be  lodged  with  voting 
trustees,  of  whom  Sir  Edward  William  Watkin,  Thomas 
Wilde  Powell,  Esq.,  and  John  Westlake,  Esq.,  shall 
be  the  first.  From  time  to  time  the  voting  trustees 
for  the  time  being  may  fill  any  vacancy  occurring  in  their 
body  and  may  add  to  their  number,  and  may  exercise 
their  power  of  voting  by  a  proxy,  appointed  under 
the  hands  of  a  majority  of  them  for  the  time  being. 
This  trust  shall  continue  until  the  full  dividend  shall 
have  been  paid  on  the  preferred  stock  for  three  con- 
secutive years.  The  said  half  of  the  common  and 
preferred  stock,  respectively,  shall  be  actually  vested 
in  and  held  by  said  trustees.  The  persons  entitled 
to  the  stock  subject  to  such  trust  shall  receive  as  evi- 
dence of  their  equitable  ownership  thereof,  and  of  the 
right  to  receive  any  dividends  declared  thereon,  certifi- 
cates in  the  ordinary  form  of  share  or  stock  certificates, 
or  as  near  as  may  be  thereto,  and  transferable  in  the 
manner  usual   for   such   certificates,   but   each   bearing 


62  THE  CONTENTS  OF 

an  endorsement,  stating  that  such  certificate  does  not 
give  the  holder  a  right  to  vote  in  respect  of  the  shares 
represented  by  it,  and  that  the  same  is  subject  to  the 
voting  trust  aforesaid."  It  is  to  be  noted  also,  in  this 
connection,  that  the  bonds  issued  under  this  reorganiza- 
tion of  the  Erie  required  for  their  validity  the  counter- 
signature of  the  secretary  of  the  voting  trustees. 

An  event  of  termination  of  an  imusual  and  quite 
indefinite  nature  was  that  of  the  New  York,  Ontario 
and  Western,  when  it  was  authorized  {Laws  of  New 
York,  1885,  chap.  421)  to  issue  bonds  in  exchange  for 
its  $2,000,000  preferred  stock,  the  statute  further  pro- 
viding: ''Whenever  any  such  exchange  shall  be  made, 
the  stock  for  which  the  bonds  shall  be  issued  and  ex- 
changed shall  be  transferred  to  and  registered  upon 
the  books  of  the  company  in  the  name  of  Thomas  P. 
Fowler,  Richard  Irvin,  Jr.,  Thomas  Swinyard,  Charles  S. 
Whalen  and  William  F.  Dunning  as  trustees  for  the 
New  York,  Ontario  and  Western  Railway  Company, 
who  shall  hold  the  same  until  all  the  preferred  stock 
shall  be  so  exchanged  and  transferred;  and  until  that 
time  the  trustees  aforesaid,  and  their  successors,  shall 
be  entitled  to  vote  upon  any  preferred  stock  so  ex- 
changed and  transferred  at  all  elections  for  directors 
representing  preferred  stock  and  at  all  meetings  of 
stockholders,  but  such  stock  shall  not  have  any  rights 
to  dividends  as  preferred  stock  or  any  other  preferen- 
tial right,  except  the  right  of  voting  as  aforesaid." 
As  early  as  March,  1886,  all  but  $210,000  of  this  pre- 
ferred stock  was  held  by  the  trustees.    As  the  preferred 


VOTING  TRUSTS  63 

stock  of  this  company  had  the  right  to  elect  eight  out 
of  the  thirteen  directors  until  a  dividend  should  be 
paid  on  the  common  stock,  the  practical  result  was 
that  these  trustees  for  the  company  controlled  the 
board.  When  all  but  $4,000  of  the  preferred  stock 
had  been  surrendered  (1904)  representatives  of  some 
$18,000,000  of  common  stock  protested  against  the 
continuance  of  the  trust,  inaccurately  assuming  that 
the  payment  of  a  dividend  on  the  common  stock  would 
terminate  the  trust.  In  January,  1905,  the  requisite 
dividend  on  the  common  stock  was  paid,  and  the 
control  of  the  board  by  the  voting  trustees  was  ended, 
but  the  trust  has  nevertheless  been  prolonged  until 
the  present  time.  Since  October,  1904,  a  bare  majority 
of  the  common  stock  and  $2,200  of  the  outstanding 
preferred  stock  has  been  held  by  the  New  York,  New 
Haven  and  Hartford  Railrc^ad  Company.  The  possi- 
bility of  terminating  this  trust  is  shown  by  the  appli- 
cation of  the  New  Haven  Company,  August  17,  1912, 
to  the  Public  Service  Commission  for  the  Second  Dis- 
trict of  New  York  for  permission  to  purchase  these 
outstanding  eighteen  shares  of  the  preferred  stock  of 
the  New  York,  Ontario  and  Western,  and  by  the  further 
petition  of  the  New  Haven  Company,  November  7, 
1913,  for  leave  to  withdraw  its  earlier  application, 
which  latter  petition  was  granted. 

A  slight  variation  on  common  practice  appeared 
in  the  1914  plan  of  the  Laramie,  Hahn's  Peak  and 
Pacific  (now  the  Colorado,  Wyoming  and  Eastern  Rail- 
way) which  provided  that  the  voting  trust  should  con- 


64  THE  CONTENTS  OF 

tinue  until  all  accrued  interest  on  the  income  bonds 
had  been  paid,  and  the  current  interest  on  those  bonds 
had  been  paid  regularly  for  two  consecutive  years,  and 
thereafter  for  such  further  period  not  exceeding  one 
year  as  the  trustees  might  deem  advisable,  if  lawful.  A 
further  development  is  in  the  instance  of  the  First 
Security  Company,  in  which  the  trust  was  created 
to  continue  for  five  years  (c/.  p.  20)  "and  thereafter 
until  the  same  shall  have  been  terminated  by  the 
written  direction  of  the  holders  of  two-thirds  in  interest 
of  the  stock  certificates  of  the "  First  National  Bank 
of  New  York  or  of  its  successor  (Pujo  Committee, 
Testimony,  p.  1485).  Under  the  Chicago  Railways 
participation  agreement  (1907)  the  trustees,  therein 
called  the  depositaries,  were  given  voting  power  until 
August  1,  1912,  "and,  to  the  full  extent  thereafter 
which  may  be  permitted  by  law,  until  all  the  Consoli- 
dated Mortgage  Bonds  of  the  Railway  Company  which 
may  be  issued  pursuant  to  the  provisions  of  the  Plan 
shall  be  fully  paid  and  discharged." 

Still  another  event  of  termination  was  adopted  in 
the  Pure  Oil  Company  trust  (1895),  which,  with  an 
excess  of  ingenuity,  provided  that  the  "agreement 
may  be  cancelled,  and  the  trust  thereby  created  dis- 
solved, only  by  the  winding  up  of  the  Pure  Oil  Company 
or  by  the  consent  in  writing,  duly  executed,  of  the 
equitable  owners  of  four-fifths  of  the  shares  held  in 
trust  hereunder,  and  of  four-fifths  of  all  the  other  shares 
of  the  company,  after  providing  in  full  for  the  redemp- 
tion or  purchase,  at  one  hundred  and  ten  dollars  per 


VOTING  TRUSTS  65 

share,  in  cash,  of  all  the  preferred  and  common  shares 
of  the  company,  at  the  thne  outstanding."  The  Stan- 
dard Oil  trust  agreement  of  January,  1882,  under  which 
there  were  nine  trustees,  was  to  '^  continue  during  the 
lives  of  the  survivors  and  survivor  of  the  trustees  in 
this  agreement  named,  and  for  twenty-one  years  there- 
after;" with  the  proviso  that  after  one  year  the  trust 
might  be  terminated  by  the  vote  of  the  holders  of 
ninety  per  cent,  of  the  certificates  and  after  ten  years 
by  the  vote  of  the  holders  of  two-thirds  of  the  certif- 
icates. Following  the  adverse  results  of  litigation 
{State  v.  Standard  Oil  Co,,  49  Oh.  St.  137;  1892),  the 
trust  was  formally  terminated  (March  21,  1892)  by 
the  vote  of  736,720  shares  out  of  950,000  shares  out- 
standing. The  reality  of  this  dissolution  was  ques- 
tioned in  the  subsequent  litigation  brought  by  the 
United  States  against  the  Standard  Oil  Company  of 
New  Jersey  and  others,  the  Supreme  Court  stating 
the  contention  as  follows:  ''It  was  alleged  that  shortly 
after  this  decision,  seemingly  for  the  purpose  of  com- 
plying therewith,  voluntary  proceedings  were  had  ap- 
parently to  dissolve  the  trust,  but  that  these  proceedings 
were  a  subterfuge  and  a  sham  because  they  simply 
amounted  to  a  transfer  of  the  stock  held  by  the  trust 
in  sixty-four  of  the  companies  which  it  controlled  to 
some  of  the  remaining  twenty  companies,  it  having  con- 
trolled before  the  decree  eighty-four  in  all,  thereby, 
while  seemingly  in  part  giving  up  its  dominion,  yet  in 
reality  preserving  the  same  by  means  of  the  control  of 
the  companies  as  to  which  it  had  retained   complete 


66  THE  CONTENTS  OF 

authority"  (Standard  Oil  Co.  v.  United  States,  221  U.  S. 
1;  1910).  Another  period  was  for  fifteen  years  or  the 
lives  of  A  and  B  and  the  survivor,  whichever  should 
happen  first  (Byington  v.  Piazza,  131  App.  Div.,  N.  Y., 
895;  1909),  while  one  event  of  termination  in  the  trust, 
created  abroad  and  set  aside  here,  of  the  Fisheries 
Company  (a  New  Jersey  corporation)  was  "when  the 
last  survivor  of  the  now  existing  descendants  of  Her 
Majesty  shall  have  been  dead  for  twenty  years." 

Another  type  of  the  event  of  termination  appeared  in 
the  Oregon  Railroad  and  Navigation  voting  trust  (Au- 
gust 19,  1896),  which  was  to  extend  to  August  17,  1906, 
but  might  be  earlier  terminated,  among  other  methods, 
whenever  the  dividends  on  the  preferred  stock  aggre- 
gated twenty  per  cent.,  or  whenever  an  amount,  in  addi- 
tion to  dividends  paid,  sufficient  to  constitute  such 
twenty  per  cent,  on  the  preferred  stock  should  be  de- 
posited in  cash  or  its  payment  guaranteed  by  the  Amer- 
ican Surety  Company  or  the  Lawyers  Surety  Company 
or  by  a  person  or  corporation  of  the  City  of  New  York 
satisfactory  to  the  Central  Trust  Company  of  New  York, 
the  voting  trustee,  "it  being  understood  that  any  such 
guaranty  shall  be  for  the  payment  on  the  first  day  of 
each  successive  calendar  year  thereafter,  at  the  rate  of  at 
least  four  per  cent,  per  annum,  of  the  balance  of  the 
twenty  per  cent.,  theretofore  unpaid."  This  method  of 
termination  was  designed  for  exercise  in  behalf  of  the 
holders  of  the  cormnon  stock,  and  it  was  provided  that 
any  dividends  actually  paid  thereafter  on  the  preferred 
stock  within  the  period  covered  by  the  guaranty  should 


VOTING  TRUSTS  67 

accrue  to  the  benefit  of  the  common  stock.  The  trust 
was  terminated  (July,  1899)  upon  the  guaranty  of  Kuhn, 
Loeb  &  Co.,  acting  for  the  Oregon  Short  Line  Raih-oad 
Company  (which  owned  at  least  162,814  shares  of  the 
common  stock)  to  pay  $1,100,000  to  the  holders  of  the 
$11,000,000  preferred  stock,  in  instahnents  at  the  rate 
four  per  cent,  per  annum  on  such  stock  from  July  1, 
1899,  to  January  1,  1902.  This  guaranty,  as  the  com- 
pany had  itself  paid  dividends  aggregating  ten  per  cent, 
on  the  stock,  fulfilled  the  requirements  as  to  the  termi- 
nation of  the  trust. 

A  method  of  termination  introducing  an  event  out- 
side the  history  of  the  company  itself  appeared  in  con- 
nection with  the  Bay  State  Company  (of  New  Jersey), 
the  entire  stock  of  which  was  placed  in  the  hands  of 
H.  H.  Rogers,  John  G.  Moore  and  F.  W.  Whitridge, 
as  trustees  for  the  benefit  of  the  Bay  State  Company  (of 
Delaware),  the  trust  to  continue  until  the  Boston  United 
Gas  bonds,  first  series,  had  been  retired  by  the  sink- 
ing fund  or  otherwise  paid  (c/.  Quar.  Jour.  Econ.,  14; 
104). 

Referring  to  events  of  termination,  mention  should  be 
made  of  the  case  of  the  Southern  Railway.  The  orig- 
inal trust  agreement  (1894)  provided  for  termination 
on  July  1,  1899,  if  at  that  time  the  preferred  stock  had 
received  five  per  cent,  in  one  year,  and  if  not,  then 
whenever  such  dividend  should  be  paid.  It  was  cor- 
rectly anticipated  that  the  semi-annual  dividend  pay- 
able October  31,  1902,  would  be  one  of  two  and  one- 
half  per  cent,  and  thus  fulfill  this  condition,  and  that 


68  THE  CONTENTS  OF 

the.  original  trust  would  then  terminate.  Pursuant  to 
the  suggestions  of  the  voting  trustees,  in  their  circular 
of  August  27,  1902,  an  extension  agreement  was  on  that 
date  executed  by  the  voting  trustees,  to  which  the 
holders  of  a  majority  of  the  outstanding  certificates  had 
assented  by  October  31.  The  extension  agreement  pro- 
vided that  the  trust  should  continue  ''until  October  15, 
1907,  and  thereafter  until  such  day  as  a  majority  in 
amount  of  the  holders  of  such  stock  trust  certificates 
stamped  as  assenting  to  this  agreement,  shall,  by  vote 
on  the  date  of  the  annual  election  for  directors  of  the 
Southern  Railway  Co.,  fix  as  the  date  of  the  termination 
of  such  agreement  and  of  the  rights  and  powers  of  the 
voting  trustees  thereunder;  without  prejudice,  however, 
to  the  continuing  rights  of  the  voting  trustees  in  their 
discretion  to  cause  to  be  made  earlier  delivery  of  stock 
certificates  in  exchange  for  stock  trust  certificates  by 
them  theretofore  issued."  The  indefiniteness  of  the 
date  of  the  termination  giving  rise  to  some  question, 
the  voting  trustees,  when  the  extension  agreement  had 
become  operative  by  the  stamping  thereunder  of  a  ma- 
jority of  stock  certificates,  announced  (October  31,  1902) 
that  they  had  then,  under  the  authority  conferred  by 
the  extension  agreement,  determined  that  it  should  ter- 
minate on  October  15,  1907,  and  that  the  trust  certifi- 
cates would  then  be  deliverable;  but  the  trust  was  con- 
tinued however  until  1914.  The  supposed  eagerness  of 
stockholders  to  secure  the  release  of  their  stock  from 
such  trusts  is  somewhat  qualified  by  noting  that  as  re- 
cently as  July  6,  1915,  Southern  Railway  voting  trust 


VOTING  TRUSTS  69 

certificates  to  the  amount  of  $80,674,100  had  not  been 
surrendered  for  stock  certificates. 

An  actual  termination  of  such  a  trust  by  the  direction 
or  concurrence  of  the  certificate  holders  is  uncommon 
(Lake  Street  Elevated,  by  eighty  per  cent,  of  the  certif- 
icate holders;  Texas  and  Pacific,  by  a  majority;  Colo- 
rado Midland,  by  a  majority;  Seaboard  Air  Line,  March, 
1908).  In  the  case  of  the  Quaker  Oats  Company  the 
holders  of  a  majority  of  the  certificates,  and  in  the  case 
of  the  St.  Louis,  Rocky  Mountain  and  Pacific  the  holders 
of  three-fourths,  have  the  power  of  termination.  In  the 
case  of  the  St.  Louis,  Iron  Mountain  and  Southern  ter- 
mination was  made  possible,  and  was  later  effected,  on  the 
direction  of  the  holders  of  ninety  per  cent,  both  of  the 
first  preferred  income  bonds  and  second  preferred  in- 
come bonds;  and  in  the  case  of  the  St.  Louis  and  San 
Francisco  termination  was  provided  for  on  the  concur- 
rence of  the  holders  of  two-thirds  of  the  certificates  of 
each  class,  at  any  time  prior  to  January  1,  1902.  In 
the  instance  of  the  Loose- Wiles  Biscuit  Company  termi- 
nation is  possible,  prior  to  a  certain  date,  by  the  direc- 
tion of  holders  of  three-fourths  of  the  outstanding  trust 
certificates.  In  the  Atlantic  and  Pacific  trust  it  was 
provided  that  the  trust  might  be  terminated  by  the  vote 
of  three-fourths  of  the  directors  of  the  three  corporations 
involved,  the  Atlantic  and  Pacific,  the  Atchison  and  the 
Frisco.  In  the  Chicago  Great  Western  plan  a  dissolution 
was  possible  on  the  request  of  the  holders  of  a  majority  of 
the  preferred  trust  certificates  and  of  sufficient  common 
trust  certificates  to  make  a  majority  of  all  of  both  classes. 


70  .  THE  CONTENTS  OF 

It  sometimes  occurs  that  the  original  object  of  a  vot- 
ing trust  may  not  have  been  wholly  accomplished  dur- 
ing the  term  for  which  it  was  created.  Under  such  cir- 
cumstances it  is  customary  for  the  trustees  to  request, 
and  usually  to  recommend,  that  their  certificate  holders 
concur  in  a  renewal  of  the  trust.  Thus  the  voting  trust 
of  the  Keystone  Telephone  Company,  of  July  1,  1905, 
was  modified  and  extended  by  the  agreement  of  July  1, 
1912,  and  was  continued  for  three  years  more  by  the 
agreement  of  February  1,  1914.  If  holders  of  certificates 
with  respect  only  to  less  than  a  majority  of  the  stock 
concur  in  the  suggestion,  it  is  naturally  deemed  of  no 
avail  to  complete  the  arrangements  for  an  extension. 
If,  however,  holders  of  a  majority  in  interest  concur,  the 
practice  followed  is  the  execution  by  the  trustees  either 
of  a  new  trust  agreement,  substantially  identical  in  terms 
with  the  original  agreement  except  as  to  the  date  of 
termination  (Bankers  Trust)  or  of  a  supplemental  agree- 
ment of  extension  (Southern;  Interborough-Metropoli- 
tan;  International  Marine).  Such  having  been  executed, 
the  trustees  issue  thereunder  new  trust  certificates  in 
place  of  those  outstanding,  or  the  original  certificates 
are  temporarily  surrendered  and  appropriately  stamped 
with  an  endorsement  showing  that  they  are  subject  to 
the  agreement  as  extended.  The  original  agreement  it- 
itself  (Interborough-Metropolitan)  may  provide  for  the 
steps  to  be  taken  as  a  preliminary  to  an  extension,  and  it 
may  contain  an  agreement  by  the  parties  to  enter  into 
such  further  agreement  (Virginia  Iron,  Coal  and  Coke). 

Another  variation  of  ordinary  practice,  involving  not 


VOTING  TRUSTS  71 

an  extension  in  time  but  rather  in  form,  was  presented 
in  the  case  of  the  Interborough-Metropolitan  Company, 
in  connection  with  the  consoHdation  of  that  company 
with  the  Finance  and  Holding  Corporation.  The  voting 
trustees  of  the  common  stock,  in  their  circular  of 
April  26,  1915,  asked  their  certificate  holders  to  give 
them  a  proxy  to  vote,  as  was  done,  at  the  meeting  of 
June  1,  1915,  for  the  consoHdation,  the  proxy  providing 
briefly:  "the  Voting  Trust  Agreement  of  February  6, 
1911,  to  be  effective  with  respect  to  such  stock  of  the 
consolidated  company  as  with  respect  to  the  present 
common  stock  of  the  Interborough-Metropolitan  Com- 
pany." However,  it  is  sometimes  provided  in  the  voting 
trust  agreement  itself  (e.  g.,  Guaranty  Trust  Company) 
that  the  trustees  may  vote  in  favor  of  a  merger,  the 
stock  in  the  merged  company  acquired  by  the  trustees 
being  subjected  to  the  terms  of  the  original  trust  agree- 
ment. 

A  practical  extension  may  be  introduced  in  connection 
with  a  reorganization,  as  when  the  plan  of  consolidation 
of  the  Seaboard  Air  Line  Railway,  of  January  12,  1905, 
provided  as  follows:  "The  present  voting  trust  agree- 
ment may  be  dissolved  in  whole  or  in  part  and  the 
stock  or  any  part  thereof  held  in  trust  thereunder  may 
be  deUvered  in  exchange  for  the  voting  trust  certificates. 
Stock  of  the  New  Company  receivable  by  the  commit- 
tee in  exchange  for  the  shares  of  the  existing  Seaboard 
Air  Line  Railway  so  dehvered  may  be  deposited  by  the 
Committee  under  a  new  \'oting  trust,  limited  in  dura- 
tion to  a  period  not  exceeding  five  years,  with  Trustees 


72  THE  CONTENTS  OF 

selected  by  the  Committee,  and  voting  trust  certificates 
under  said  new  voting  trust  may  be  delivered  by  the 
committee  to  the  depositors  under  the  plan.  Any 
stockholder  of  the  New  Company  may  deposit  his 
stock  under  such  new  voting  trust." 

Even  when  all  the  stock  has  been  in  the  first  instance 
subject  to  a  trust,  an  extension  of  the  agreement  pro- 
vides the  opportunity  for  the  stockholders  to  withdraw 
their  stock  from  the  trust.  Thus,  after  the  extension  of 
the  International  Mercantile  Marine  trust,  two  stock- 
holders owning  about  1200  shares,  elected  to  take  stock 
instead  of  new  trust  certificates,  and  in  many  cases  the 
proportion  of  the  stock  held  directly  by  individuals  has 
been  considerably  larger.  The  possibilities  arising  from 
such  a  situation  have  provoked  rather  strenuous  criti- 
cism not  so  much  of  voting  trusts  as  of  stock  exchanges. 
It  seems  to  have  been  the  rule  of  the  New  York  Stock 
Exchange,  for  instance,  not  to  carry  at  the  same  time 
on  the  list  of  securities  open  for  trading  both  the  stock 
of  the  company  and  trust  certificates  with  respect  to 
other  shares  of  the  same  issue,  when  the  public  hold  only 
a  small  portion  either  of  the  stock  or  of  the  trust  cer- 
tificates and  there  is  thus  made  possible  a  disturbance 
of  the  market  by  a  corner  of  the  stock  or  of  the  trust 
certificates  requiring  for  its  consummation  a  com- 
paratively small  amount  of  cash.  It  has  thus  hap- 
pened, when  trust  certificates  representing  the  larger 
part  of  a  stock  issue  have  been  listed,  that  the  stock 
certificates  held  by  others  than  the  trustees,  when  the 
aggregate  is  small,  have  not  been  listed.     The  latter 


VOTING  TRUSTS  73 

have  not  been  so  fully  available  for  use  as  collateral  as 
are  listed  securities,  and  this  condition  has  been  used 
rather  inaccurately  to  illustrate  the  charge  that  a  stock 
exchange  may  thus  strengthen  the  control  of  the  voting 
trustees  by  indirectly  forcing  into  their  hands  much 
stock  that  ordinarily  would  be  withheld.  It  is  interest- 
ing to  compare  this  criticism  with  the  early  and  obvious 
suggestion  that  voting  trusts  tended  to  prevent  purely 
speculative  trading  in  stocks.  The  alleged  discrim- 
ination, if  such  it  is,  may  easily  be  given  an  exaggerated 
importance,  because  such  a  minority  stockholder,  even 
in  co-operation  with  those  in  like  position  with  him, 
could  in  no  event  have  much  effect  on  the  policy  or  con- 
duct of  the  business,  while  if  he  really  wished  a  loan  he 
might  readily  convert  his  certificate  into  a  more  accept- 
able form  of  collateral.  In  passing,  mention  of  the 
minority  stockholder  suggests  his  customary  first  step 
in  demanding  from  the  corporation  a  list  of  its  stock- 
holders. This  preliminary  to  a  campaign  of  reform  is 
not  available  in  securing  such  a  list  of  certificate  holders 
from  trustees  who  are  not  subject  to  corporation  laws. 
It  has  occurred  that  the  trust  agreement  has  forbidden 
the  trustees  to  supply  such  information  except  on  pre- 
scribed conditions,  and  even  without  such  a  restriction 
it  is  improbable  that  they  would  comply  with  such  a 
request.  However,  especially  where  the  trust  agreement 
provides  for  meetings  of  certificate  holders,  it  would 
seem  that  such  a  request  has  a  reasonable  basis,  and  in 
time  might  be  upheld  by  such  courts  as  tend  to  treat 
trust  certificates  as  quite  analogous  to  stock  certificates 


74  THE  CONTENTS  OF 

(e.  g.,  O'Grady  v.  U.  S.  Indep.  Tel.  Co.,  71  Atl.  1040; 
N.  J.,   1909). 

The  trustees  in  some  instances  have  been  given  the 
power  of  terminating  the  trust  by  actually  selling  the 
stock  held  by  them  and  distributing  the  proceeds  among 
the  certificate  holders,  and  of  doing  this  either  at  their 
discretion  (Anthony  and  Scovill  Company),  or  subject 
to  the  approval  of  a  certain  proportion  of  the  certificate 
holders,  or  subject  to  some  limitation  as  to  price.  While 
a  provision  permitting  the  surrender  of  the  control  of  a 
concern  may  be  somewhat  inconsistent  with  the  original 
design  in  the  voting  trust  of  holding  and  developing  a 
property,  still  if  the  result  of  such  policy  produces  an 
increase  in  the  value  of  the  stock  one  real  object  of  the 
trust  has  been  attained,  and  the  trustees  may  thus 
procure  a  better  return  than  could  the  stockholders, 
acting  individually  and  without  the  power,  except  by 
some  pooling  arrangement,  to  dehver  the  actual  control. 
For  instance,  the  voting  trustees  of  the  Colorado  Mid- 
land, with  the  consent  of  the  holders  of  a  majority  of 
their  certificates,  sold  the  control  to  two  other  roads 
(1900).  Thus  also  the  voting  trustees  have  been  au- 
thorized to  sell  at  a  fixed  minimum  (Lehigh  Coal  and 
Navigation),  merely  to  sell  on  the  unanimous  vote  of 
the  trustees  (Louisville,  St.  Louis  and  Texas),  to  sell  at 
par  or  better  (Virginia  Iron,  Coal  and  Coke;  Union 
Terminal  Association),  to  sell  on  a  majority  vote  of  the 
trustees  for  not  less  than  par  (Chicago  Southern  plan) 
or  to  sell  by  a  like  vote  at  not  less  than  seventy-five 
per  cent,   of  par   (Southern  Indiana  plan),   or  to  sell 


VOTING  TRUSTS  75 

subject  to  the  approval  of  a  majority  of  each  class 
of  certificate  holders  (Toledo,  St.  Louis  and  West- 
ern; Toledo,  St.  Louis  and  Kansas  City).  When  the  ten 
years  voting  trust  of  the  St.  Louis,  Rocky  Mountain  and 
Pacific  common  stock  (1905)  was  dissolved  in  1912,  a 
new  trust  for  five  years  was  created,  with  power  in  the 
trustees  either  to  sell  all  the  deposited  stock  at  not  less 
than  par  or  to  sell  all  or  any  part  of  the  deposited 
stock  in  excess  of  $5,500,000,  at  such  price  as  the  trustees 
might  determine  upon,  subject  to  the  right  of  depositors 
to  elect  not  to  participate  in  the  sale.  In  another  in- 
stance the  trustees  were  given  power  to  sell  without  re- 
striction as  to  price,  but  subject  to  the  limitation  that 
the  proceeds  should  be  distributed  among  the  certificate 
holders  only  after  the  claims  of  certain  note  holders 
had  been  paid  (Milliken  Bros.,  Inc.,  plan).  As  another 
method,  the  trustees  may  be  empowered  in  the  agree- 
ment not  to  sell  the  stock  but  to  vote  to  sell  the  assets 
of  the  company  (Jackson  Company). 

Under  the  Cincinnati,  Hamilton  and  Dayton  plan  of 
May  24,  1909,  the  voting  trust  was  to  expire  July  1, 
1916,  and  on  that  date  the  Baltimore  and  Ohio  (whose 
president  was  one  of  the  voting  trustees)  was  to  be  en- 
titled to  buy  the  controlling  stock  at  a  price  to  be  fixed 
by  arbitrators.  Details  as  to  the  price  were  modified  by 
a  supplemental  agreement,  October  21,  1912,  between 
the  Baltimore  and  Ohio  and  the  firm  of  J.  P.  Morgan 
&  Co.,  as  set  out  in  the  annual  report  of  President  Wil- 
lard  for  the  year  ended  June  30,  1914.  Under  the  reor- 
ganization plan  of  the  Staten  Island  Electric  Railroad 


76  THE  CONTENTS  OF 

(1902)  the  voting  trustees  were  given  the  broad  power 
to  sell  the  stock  on  such  terms  as  they  might  determine; 
and  under  the  voting  trust  of  the  Long  Island  Rail- 
road (February  1,  1897)  the  trustees  agreed  to  sell  a 
majority  of  the  company's  stock,  reserving  to  the  certif- 
icate holders  their  election  as  to  participating  in  the 
sale  (1900).  In  some  agreements  the  element  of  pos- 
sible sale  has  been  the  principal  factor  (e.  g.,  Baltimore, 
Chesapeake  and  Atlantic;  Dubuque  and  Sioux  City 
Railroad;  Pacific  Mail  Steamship  Company;  Anthony 
and  Scovill  Company),  and  such  agreements  might 
naturally  be  held  to  create  not  a  voting  trust  with 
power  of  sale  but  ''a  power  of  sale  with  an  incidental 
provision  in  regard  to  voting"  {Hall  v.  Merrill  Trust 
Co.,    106   Me.   465;    1910). 

While  it  may  be  said  that  the  effect  of  certain  of  these 
provisions,  especially  as  to  the  control  of  the  board  and 
over  the  dissolution  of  the  trust,  is  to  place  too  much 
power  in  the  hands  of  the  voting  trustees,  yet  it  is  to  be 
noted  that  they  have  in  fact  refrained  from  exercising 
as  much  power  as  they  might.  Thus,  the  voting  trustees 
of  the  Southern  Railway  consulted  the  certificate  holders 
before  consenting  to  a  mortgage;  the  voting  trustees  of 
the  Northern  Pacific  and  of  the  International  Mercan- 
tile Marine  Company  elected  to  terminate  their  trust 
sooner  than  they  were  obliged  to ;  and  the  voting  trustees 
of  the  Kansas  City  Southern,  when  the  voting  trust  was 
to  expire  shortly  after  an  annual  meeting  (1905)  ad- 
journed the  meeting  in  order  that  the  board  for  the  en- 
suing year  might  be  elected  by  the  stockholders  them- 


VOTING  TRUSTS  77 

selves  after  the  release  of  their  certificates.  It  has  also 
even  occurred  that  trustees  have  voted  for  the  election 
as  directors  of  nominees  of  the  minority  interest  (Read- 
ing, 1899). 

The  trustees  also  agree  to  deliver  corresponding  stock 
certificates,  upon  the  surrender  to  them  of  the  outstand- 
ing trust  certificates,  on  the  termination  of  the  trust. 
The  voting  trust  agreement  or  the  certificate  may  state 
simply  that  the  holder  will  be  entitled  on  a  specified 
date,  or  not  before  such  a  date,  to  receive  a  stock  certif- 
icate for  a  number  of  shares  equal  to  the  number  rep- 
resented by  his  trust  certificate;  while  the  trust  certif- 
icate usually  recites  also  that  it  is  issued  under  and 
subject  to  the  conditions  of  the  trust  agreement  therein 
referred  to,  such  reference  covering  the  cases  in  which 
the  stock  certificates  may  in  the  alternative  become  de- 
liverable on  a  date  other  than  the  calendar  date  fixed  in 
the  agreement.  The  agreement  should  as  well  make  it 
obligatory  on  the  certificate  holders,  upon  the  termi- 
nation of  the  trust,  to  accept  stock  certificates  and  sur- 
render their  corresponding  trust  certificates,  in  order 
that  the  trust  may  be  completely  dissolved  in  reality  as 
well  as  theoretically.  As  it  sometimes  happens  that 
trust  certificates  may  have  been  lost,  or  that  some  cer- 
tificate holders  may  not  have  received  promptly  the 
actual  notice  of  dissolution,  the  duties  of  the  trustees 
may  be  effectually  terminated  by  providing  that  upon 
the  dissolution  of  the  trust  the  trustees  may,  after  due 
notice,  deposit  stock  certificates  with  a  trust  company 
(Interborough-MetropoHtan ;    Allis-Chalmers;    Guaranty 


78  THE  CONTENTS  OF 

Trust),  or  with  the  company  itself  (Richmond  Radiator) 
to  be  exchanged  for  trust  certificates  when  surrendered, 
the  duties  of  the  trustees  ending  with  such  deposit. 

When  thus  a  voting  trust  has  been  terminated,  and 
some  holders  of  trust  certificates  delay  the  withdrawal 
of  their  stock  certificates,  if  a  meeting  of  stockholders 
should  be  held  one  slight  practical  difficulty  arises  from 
such  delay.  The  trust  certificate  holder  is  not  entitled 
to  vote  as  a  stockholder,  and  the  trustees,  although 
stockholders  of  record,  are  not  entitled  to  vote  under 
the  agreement.  This  situation  may  be  met,  in  some 
degree,  by  the  trust  certificate  holder  giving  a  proxy 
to  the  trustees  in  whose  name  his  stock  is  still  standing. 
This  might  serve  to  protect  the  trustees  for  any  action 
thus  taken,  and  might  be  sufficient  unless  the  company 
itself  should  insist  that,  the  trust  having  for  all  purposes 
expired,  the  trustees  were  thus  disqualified  from  voting, 
and  also  that  a  proxy  from  the  holder  of  a  trust  cer- 
tificate could  not  be  of  any  effect. 

As  to  the  personnel  of  the  voting  trustees,  the  choice 
of  the  first  set  is  a  practical  matter  controlled  chiefly  by 
the  design  of  giving  proper  representation  to  all  sub- 
stantial interests  concerned.  Where  the  trust  is  created 
as  an  incident  of  a  reorganization  the  trustees  may  be 
named  in  the  reorganization  agreement  (Chicago  Great 
Western;  Northern  Pacific;  Wisconsin  Central,  1899; 
New  Orleans,  Mobile  and  Chicago  Railroad)  or  they 
may  be  the  members  of  the  reorganization  committee 
(International  Fire  Engine;  Interstate  Telephone;  Kinder- 
hook  and  Hudson  Railway;  Missouri,  Kansas  and  Texas; 


VOTING  TRUSTS  79 

United  Button)  or  their  designation  or  approval  left  to 
the  reorganization  committee  (McCrum-Howell ;  Indian 
Refining  Co.;  Whitney  Co.;  United  Coal  Co.),  although 
the  committee's  power  in  this  regard  is  at  times  some- 
what restricted.  Thus,  of  three  trustees  only  one  was  to 
be  named  by  the  committee  and  two  by  those  supplying 
new  funds  (McCall  Ferry  Power).  In  an  instance  of 
seven  trustees,  only  one  was  to  be  named  by  the  com- 
mittee and  six  by  an  individual  acting  practically  as  a 
syndicate  manager  (Denver,  Northwestern  and  Pacific). 
In  one  case  of  the  creation  of  a  voting  trust  without  any 
reorganization  the  members  of  the  corporation's  executive 
conmiittee  were  named  as  voting  trustees  (International 
Nickel).  In  the  case  of  the  Kansas  City  and  Memphis 
Railway,  of  the  three  voting  trustees  one  was  to  be 
named  by  the  company  itself,  one  by  the  Kansas  City 
Southern,  and  the  third  by  a  designated  banking  firm. 
In  the  Erie  plan  of  August  20,  1895,  it  was  provided 
that  the  three  or  five  voting  trustees  should  be  appointed 
by  J.  P.  Morgan  &  Co.  and  J.  S.  Morgan  &  Co.  Often, 
if  no  other  provision  is  made,  their  appointment  is  made 
by  a  reorganization  committee  under  the  general  powers 
conferred  by  the  reorganization  agreement. 

With  respect  to  vacancies  occurring  among  the  voting 
trustees,  after  their  selection  and  before  the  execution  of 
the  trust  agreement,  the  reorganization  plan  may  pro- 
vide for  the  contingency,  as  by  indicating  specifically 
that  certain  parties  may  nominate  to  the  vacancy.  This 
situation  was  met  in  the  Alabama  Consolidated  Coal 
and  Iron  and  the  Southern  Iron  and  Steel  joint  plan  by 


80  THE  CONTENTS  OF    * 

the  arrangement  that,  of  the  five  voting  trustees  named 
in  the  plan,  the  place  of  Cecil  A.  Grenfell  in  this  interim 
should  be  filled  by  the  holders  of  certificates  of  deposit 
for  stocks  of  the  Southern  Company,  the  place  of 
A.  J.  Hemphill  by  the  holders  of  certificates  of  deposit 
for  bonds  of  the  Southern  Company,  the  places  of  Pliny 
Fisk  and  Henry  H.  Melville  by  the  board  of  the  Ala- 
bama Company,  and  the  place  of  Edwin  G.  Merrill  by 
the  other  four  named  in  the  plan.  In  the  Philadelphia 
and  Reading  amended  plan  (December  14,  1886)  it  was 
provided  that  alternates  for  J.  Pierpont  Morgan  and 
John  Lowber  Welsh  should  be  named  by  the  Syndicate, 
those  for  John  Wanamaker  and  Austin  Corbin  by  the 
''Board  of  Reconstruction  Trustees,"  and  that  the  alter- 
nate for  the  fifth  position  should  be  named  by  the  four 
other  voting  trustees.  In  the  Northern  Pacific  plan 
(March  16,  1896)  it  was  provided  that  in  case  of  vacan- 
cies occurring  prior  to  the  actual  receipt  of  the  stock  by 
the  voting  trustees,  the  successors  or  substitutes  should 
be  appointed  as  follows:  as  regards  the  membership  of 
Dr.  Siemens,  by  the  Reorganization  Committee  of 
which  the  chairman  was  Edward  D.  Adams;  as  re- 
gards the  membership  of  August  Belmont,  by  the  Pro- 
tective Committee  of  which  Bray  ton  Ives  was  chairman; 
and  as  regards  the  three  other  positions,  by  the  Mana- 
gers, J.  P.  Morgan  &  Co.  In  the  Union  Pacific,  Denver 
and  Gulf  plan  (September  29,  1898),  in  which  were 
named  the  five  original  voting  trustees,  it  was  provided 
that  in  the  event  of  death  or  incapacity  of  any  of  them 
''prior  to  the  creation  of  the  voting  trust"  the  vacancy 


VOTING  TRUSTS  81 

should  be  filled  by  the  survivors;  while  the  reorganiza- 
tion plan  of  the  Baltimore  and  Ohio  provided  that  such 
a  vacancy  should  be  filled  by  the  Reorganization  Man- 
agers. 

It  is  usually  provided  that  any  voting  trustee  may 
resign  by  delivering  to  the  other  voting  trustees  his  writ- 
ten resignation,  to  take  effect  ten  days  thereafter  (Bank- 
ers Trust;  Baltimore  and  Ohio;  Reading;  Southern 
Railway) ;  or  the  ten  day  provision  may  be  omitted  (Eq- 
uitable Life).  The  procedure  has  been  made  more  def- 
inite by  the  provision  that  the  written  resignation  should 
be  delivered  at  the  office  of  the  transfer  agent  of  the  vot- 
ing trustees  (General  Motors) ;  and  the  possibility  of  the 
remaining  trustees  failing  promptly  to  fill  the  vacancy 
has  been  met,  for  example,  by  giving  power  to  a  trust 
company  to  nominate  a  trustee  after  the  vacancy  has 
remained  unfilled  a  specified  period. 

If  a  vacancy  should  occur  after  the  agreement  has 
been  executed,  it  is  usually  provided  in  the  agreement 
that  the  survivors  may  fill  the  vacancy  (Erie;  Southern 
Railway;  Equitable  Life;  Bankers  Trust;  General  Motors; 
Reading).  In  the  Toledo  Railways  and  Light  plan  the 
seven  trustees  were  treated  as  constituting  two  groups 
and  a  vacancy  in  either  group  was  to  be  filled  by  the 
surviving  trustees  of  the  group.  It  has,  however,  oc- 
curred that  the  right  to  fill  vacancies  has  been  lodged 
elsewhere,  as,  for  instance,  in  the  provision  that  the 
successor  of  Dr.  Siemens  in  the  Northern  Pacific  voting 
trust  should  be  nominated  by  the  Deutsche  Bank  and 
elected  by  the  remaining  trustees.    In  the  International 


82  THE  CONTENTS  OF 

Harvester  voting  trust  it  was  provided  that  the  succes- 
sor of  George  W.  Perkins  should  be  appointed  by  a 
specified  banking  firm,  the  successors  of  Cyrus  H.  Mc- 
Cormick  and  Charles  Deering  by,  in  each  instance,  a 
person  named  in  the  agreement,  and  on  his  failure  to 
appoint  by  another  designated  person,  and  on  the  fail- 
ure of  both  such  persons  to  act,  by  the  other  two 
trustees. 

Under  the  Baltimore  and  Ohio  voting  trust  the 
successor  of  each  of  the  five  trustees  was  to  be  named, 
respectively,  by  designating  banking  firms  or  institu- 
tions, with  the  qualification  that  ''such  appointment 
shall  in  every  case  be  confirmed  by  the  other  voting 
trustees  by  written  instrument."  In  a  similar  way 
in  the  Interborough-Metropolitan  voting  trust  of  five 
trustees,  the  successors  of  two  were  to  be  appointed 
by  a  designated  trust  company,  the  successors  of  two 
others  by  a  designated  banking  firm,  and  the  successor 
of  the  fifth  was  to  be  appointed  as  follows:  the  trustee 
in  question  was  empowered,  within  thirty  days  from 
the  date  of  the  agreement,  to  lodge  with  a  certain  trust 
company  an  instrument  naming  three  persons  to  fill  the 
vacancy  in  the  order  named,  and  if  none  of  them  served 
the  vacancy  was  to  be  filled  by  the  unanimous  vote  of 
the  four  remaining  trustees.  In  the  Chicago  Great  West- 
ern voting  trust,  the  right  to  nominate  to  fill  any  vacancy 
among  the  trustees  was  retained  by  the  Reorganiza- 
tion Managers,  and  in  the  case  of  the  United  Rail- 
ways Company  of  St.  Louis  the  power  to  fill  vacancies 
was  given  to  Brown  Brothers  and  Company,  who  had 


VOTING  TRUSTS  83 

been  Syndicate  Managers,  and  was  to  be  exercised  by 
the  surviving  trustees  only  in  case  the  bankers  failed 
within  ten  days  to  fill  the  vacancy. 

In  the  Wisconsin  Central  Railway  trust  (1889;  to  be  dis- 
tinguished from  the  Wisconsin  Central  Company  and  the 
Wisconsin  Central  Railroad  Company)  it  was  provided 
that  a  successor  might  be  appointed  by  the  surviving  trus- 
tees, subject  to  approval  in  writing  by  the  holders  of  a  ma- 
jority of  both  classes  of  certificates.  In  another  instance, 
of  the  three  voting  trustees  two  were  apparently  operat- 
ing owners  and  one  a  banker,  and  to  safeguard  against 
an  ultra  financial  influence  it  was  provided  that  while 
the  successor  of  A,  the  banker,  should  be  named  by  a 
designated  banking  firm,  the  successor  of  B  should  be 
named  by  C  or  C's  successor  and  the  successor  of  C 
should  be  named  by  B  or  B's  successor,  the  banker 
having  the  power  to  nominate  only  in  case  his  fellow 
survivor  did  not  fill  the  vacancy  within  a  limited  period. 
In  the  plan  of  Louisville,  St.  Louis  and  Texas  it  was 
arranged  that  the  successor  of  one  trustee  should  be 
named  by  the  holders  of  preferred  trust  certificates  and 
the  successors  of  the  other  two  trustees  by  the  holders 
of  the  common  trust  certificates.  In  an  unusual  case, 
provision  was  made  that  the  five  voting  trustees  should 
be  elected  each  year,  three  by  the  holders  of  first  mort- 
gage bonds,  one  by  holders  of  second  mortgage  bonds 
and  one  by  holders  of  leased  line  bonds  (Atlantic  and 
Great  Western);  and  in  the  Quaker  Oats  plan  it  was 
provided  that  the  trustees  should  be  elected  annually 
by  the  certificate  holders. 


84  THE  CONTENTS  OF 

The  trust  agreement  should,  in  the  proper  case,  have 
suitable  provisions  with  respect  to  the  control  of  the 
trustees  by  consents  or  instructions  given  by  the  certif- 
icate holders,  with  respect  to  calling  meetings  of 
certificate  holders,  and  also  with  respect  to  notices  re- 
quired to  be  given  of  such  meetings.  If  the  agreement 
does  not  require  the  request  or  consent  of  the  certificate 
holders  for  any  particular  action  by  the  trustees,  and 
does  not  give  them  power  over  the  selection  of  succes- 
sor trustees  or  over  the  cancellation  of  the  agreement, 
it  may  be  unnecessary  to  provide  either  for  any  meet- 
ings of  the  certificate  holders  or  for  the  giving  of  any 
notice  to  them.  Where,  however,  they  have  any  such 
powers,  the  exercise  of  such  should  be  available  either 
by  concurrent  instructions  or  by  action  taken  at  a 
meeting,  and  the  method  of  calling  such  meetings,  or  of 
giving  notice  to  file  such  instruments,  should  be  more 
definitely  set  forth  than  is  always  the  case. 

It  is  interesting  to  note  that  the  Standard  Oil  trust 
agreement  of  1882  was  much  more  liberal  than  most  such 
agreements  as  to  meetings,  in  that  the  trustees  were  re- 
quired to  call  a  meeting  on  the  request  of  holders  of  ten 
per  cent,  of  the  outstanding  certificates.  While  now, 
considering  the  more  important  instances,  it  seldom 
occurs  that  a  trust  company  is  selected  to  act  as  voting 
trustee,  yet  when  this  plan  is  followed  four  courses,  at 
least,  are  open;  that  the  trustee  may  vote  the  stock  as 
it  deems  best  (a  detail  at  the  basis  of  much  criticism  of 
early  voting  trusts);  that  the  trustee  vote  the  stock  as 
directed  by  a  committee;  that  the  trustee  vote  for  the 


VOTING  TRUSTS  85 

election  as  directors  of  nominees  of  specified  parties 
in  interest;  or  that  the  trustee  vote  as  instructed  by  the 
certificate  holders.  In  a  case  of  the  last  type  it  is 
necessary  to  provide  fully  for  meetings  of  certificate 
holders,  and  this  was  done  with  elaborate  completeness 
in  the  voting  trust  of  the  Oregon  Railroad  and  Naviga- 
tion Company. 

Prescribing  any  qualifications  for  the  voting  trustees 
is  extremely  rare,  although  as  early  as  the  Erie  recon- 
struction plan  of  1877  it  was  provided  that  each  voting 
trustee  should  be  a  "substantial  bondholder  at  the  time 
of  his  appointment"  and  on  ceasing  to  be  such  he  should 
resign  as  a  voting  trustee;  and  in  the  case  of  the  United 
States  Pipe  Line  the  single  individual  trustee  was  re- 
quired to  give  a  bond  for  the  proper  performance  of  his 
duties.  In  the  case  of  the  First  Security  Company  it 
was  provided  that  each  trustee  should  become  disqual- 
ified as  such  upon  ceasing  to  hold  one  of  certain  speci- 
fied offices  in  the  First  National  Bank  of  New  York. 

The  trust  agreement  may  properly  confer  on  the 
trustees  the  power  to  establish  their  own  rules  of  pro- 
cedure, a  power  which  in  any  event  would  be  naturally 
implied.  Such  rules  relate  to  the  detailed  administration 
of  the  trust,  such  as  the  appointment  and  duties  of  their 
signing  agents,  depositaries,  registrars  and  transfer 
agents.  These  appointments  may  in  fact  be  incorporated 
in  the  agreement  itself,  and  depositaries  and  registrars 
often  are  thus  named,  coupled  however  with  a  recital 
of  the  power  of  the  trustees  to  revoke  any  such  appoint- 
ment and  to  fill  the  vacancy.     While  as  agents  for  the 


86  THE  CONTENTS  OF 

signing  of  trust  certificates  and  as  transfer  agents  the 
trustees  not  infrequently  appoint  individuals,  yet  these 
positions  and  also  those  of  depositary  and  registrar  are 
now  more  commonly,  and  usually  more  efficiently,  filled 
by  trust  companies. 

The  agreement  ordinarily  provides  that,  except  when 
otherwise  specially  stated,  the  act  of  a  majority  of  the 
trustees  shall  be  deemed  the  act  of  all,  although  in  the 
case  of  the  Western  New  York  and  Pennsylvania  Railway 
(1895)  it  was  provided  that  the  trustees,  or  those  present, 
should  vote  unanimously,  and  in  exceptional  circumstances 
unanimous  action  may  be  desirable  (c/..  Equitable  Life). 

The  action  of  the  trustees  may  be  determined  upon 
at  a  meeting  or,  without  a  meeting,  in  writing;  and 
frequently  each  voting  trustee  may  be  empowered  to 
give  his  proxy  as  trustee  to  any  other  trustee;  and  the 
trustees  themselves  may  often  act  through  a  joint  proxy, 
such  proxy  being  one  of  their  own  number  or  any  other 
person  as  variously  arranged  for,  and  as  often  done  with- 
out any  special  authority  other  than  that  possessed  by 
a  stockholder  of  record;  but  their  freedom  to  vote 
through  a  proxy  other  than  one  of  themselves  has  at 
times  been  restricted. 

It  is  sometimes  specifically  provided  that  a  voting 
trustee  may  serve  as  a  director  or  officer  of  the  company 
(Maxwell  Motor),  and  although  the  recital  may  have  no 
real  effect  by  way  of  enlarging  the  power  of  the  trustee, 
it  serves  often  a  proper  purpose  merely  in  stating  prac- 
tically that  the  trustees  may  vote  in  their  own  favor. 
As  a  matter  of  fact,  the  men  chosen  to  serve  as  voting 


VOTING  TRUSTS  87 

trustees  are  selected  because  of  qualifications  which 
would  make  them  valuable  members  of  the  board  of 
directors;  and  in  the  Denver,  Northwestern  and  Pacific 
Railway  plan  it  was  stated  that  the  voting  trustees 
should  serve  as  directors.  The  voting  trust  agreement 
of  the  United  Railways  Company  of  St.  Louis  provided: 
"Any  voting  trustee  hereunder  may  vote  in  person  or 
by  proxy  for  any  other  person,  whether  or  not  a  voting 
trustee."  On  this  subject  a  pertinent  comment  was 
made  by  the  court  in  the  case  of  the  Philadelphia  and 
Reading  voting  trust,  in  the  following  terms:  "There  is 
another  point  which  may  be  touched  lest  it  should  seem 
to  have  been  over-looked.  The  voting  trust  was  orig- 
inally intended  to  have  five  members.  There  are  but 
four,  one  of  whom,  as  it  has  been  sworn,  stands  aside 
and  will  take  no  part  in  the  coming  election.  The  in- 
junction affidavit  avers  that  the  remaining  three  intend 
to  choose  one  of  their  number  as  president  of  the  rail- 
road. We  do  not  wish  to  be  understood  as  implying 
that  such  an  election  will  be  valid  or  can  stand.  Even 
if,  as  we  think,  the  power  of  the  trustees  to  elect  is, 
from  its  nature,  and  because  it  concerns  the  public,  one 
that  may  be  exercised  by  a  majority,  it  is  still  held  in 
trust,  and  the  votes  cast  should  be  disinterested  and 
without  personal  bias.  The  question  whether  one  of 
the  trustees  can  vote  for  himself  is  not,  however,  raised 
by  the  bill  or  presented  in  the  prayer  for  relief,  and  we 
do  not,  therefore,  think  it  necessary  to  form  or  express 
an  opinion  as  to  the  law"  {Shelmerdine  v.  Welsh,  7 
Rlwy.  and  Corp.  L.  J.  89;  1890). 


88  THE  CONTENTS  OF 

Mention  should  be  made  of  certain  provisions  which 
have  not  been  commonly  used,  as: 

that  the  reorganization  committee  might  designate, 
as  earlier  was  more  frequently  done,  a  corporation  as 
sole  voting  trustee  (Chicago  Southern  Plan,  1910;  c/.. 
Commonwealth  v.  Roydhouse,  233  Pa.  234;  1911;  cf., 
Oregon  Railroad  and  Navigation); 

that  the  stock  held  by  the  trustees  should  be  deemed 
also  a  pledge  to  secure  the  company's  bonds  (United 
Button) ; 

that  the  voting  trustees  might  pledge  the  stock  to 
secure  a  syndicate  that  might  imderwrite  certain  bonds 
of  the  company  (Chicago  Southern  plan); 

that  the  voting  trustees  might  pledge  the  stock  to 
pay  the  debts  of  the  company  (Linville  Improvement 

Co.); 

that  the  voting  trustees  might  sell  the  stock  to  pay 
the  debts  of  the  company  (Anthony  and  Scovill  Co.). 

The  number  of  voting  trustees  is  usually  three  or  five, 
and  sometimes  seven,  while  in  one  instance  there  were 
nine  (Standard  Oil),  in  another  twelve,  all  apparently 
serving  also  as  directors  of  the  company  (Louisville 
Home  Telephone),  and  in  another  fifteen  (Pure  Oil). 

The  source  of  the  trustees'  title  to  the  stock  may  be 
indicated  in  the  preamble  of  the  agreement,  as  by  the 
recital  that  the  stock  certificates  have  been  delivered  to 
the  trustees  by  the  managers  pursuant  to  the  terms  of 
the  reorganization  plan  (Northern  Pacific;  Baltimore 
and  Ohio;  Reading),  or  by  the  committee  under  the  re- 
organization plan   (Erie;  Southern),  or  directly  by  the 


VOTING  TRUSTS  89 

company  itself  on  the  order  of  the  Reorganization  Man- 
agers (Chicago  Great  Western),  or  that  an  individual  has 
dehvered  the  stock  certificates  to  the  trustees  (Inter- 
national Harvester) ;  or  the  chain  of  title  may  be  shown 
by  the  recitals  in  the  contractual  portions  of  the  instru- 
ment (Interborough-Metropohtan) .  The  transfer  of 
title  may  be  from  the  several  stockholders  themselves, 
the  agreement  providing  that  stockholders  may  become 
parties  to  it  by  delivering  their  stock  certificates  to  the 
trustees  (General  Motors);  or  the  stockholders  may  be- 
come parties  by  actually  signing  the  agreement  (Bankers 
Trust)  and  therein  agreeing  to  transfer  their  certificates. 
The  converse  of  this  should  appear  in  an  appropriate 
agreement  on  the  part  of  the  trustees,  as  to  dehver  their 
trust  certificates  to,  or  on  the  order  of,  the  reorganization 
managers  or  reorganization  committee,  when  the  entire 
stock  has  been  received  from  those  parties;  or  merely  to 
deliver  their  trust  certificates  to  any  parties  surrendering 
stock  to  them. 

The  stock,  when  so  delivered  directly  or  indirectly  by 
reorganization  managers  or  by  a  conmaittee,  usually  con- 
sists of  the  entire  issue,  less  a  number  of  shares  reserved, 
either  specifically  or  not,  for  use  in  qualifying  directors. 
While  these  few  shares  are  not  usually  vested  in  the 
trustees,  it  must  nevertheless  be  the  fact  that  the  actual 
control  of  these  certificates  should  rest  with  the  trustees. 
This  is  necessary  in  order  to  qualify  new  directors  in 
case  of  changes  in  the  board,  for  with  trust  certificates 
outstanding  representing  all  other  shares  it  would  be  im- 
possible to  maintain  the  qualification  of  the  board  unless 


90  THE  CONTENTS  OF 

these  few  certificates  were  at  the  disposal  of  the  trustees. 
In  the  case  of  the  Chicago  Great  Western  eleven  qual- 
ifying shares  were  excluded  from  the  trust,  in  the  Inter- 
national Mercantile  Marine  one  hundred  and  ten  shares, 
in  the  Denver,  Northwestern  and  Pacific  plan  seven,  in 
the  Reading  and  the  Northern  Pacific  trusts  two  thousand, 
in  the  Southern  one  thousand,  in  the  Erie  one  hundred  and 
in  the  Colorado  and  Southern  fifty.  Usually  these  qualify- 
ing shares  are  thus  left  informallj^  without  really  beneficial 
owners.  Nevertheless,  provision  has  sometimes  been  made 
for  the  correct  disposition  of  these  qualifying  shares  (Bank- 
ers Trust;  Richmond  Radiator),  as  by  specifically  plac- 
ing them  in  the  custody  of  the  trustees  for  the  pur- 
pose indicated.  Thus,  in  the  case  of  the  Indian  Refining 
Company  voting  trust  it  was  provided  "that  the  Voting 
Trustees  are  authorized  to  transfer  one  share  of  stock  to 
each  of  such  persons  as  may  be  selected  by  them  in 
order  to  qualify  such  persons  to  act  as  Directors  of  the 
Company,  or  to  serve  the  company  in  any  other  capacity, 
and  all  certificates  of  stock  issued  for  such  purpose  shall 
be  endorsed  in  blank  by  the  persons  to  whom  issued,  and 
shall  be  deposited  with  the  Voting  Trustees  and  held  by 
them  for  the  purposes  of  this  agreement."  This  control 
of  such  shares  was  also  given  to  the  voting  trustees 
under  the  Chicago  City  and  Connecting  Railways  Col- 
lateral Trust,  in  which  case  the  provision  was  indirectly 
attacked  by  an  attempt  to  show  that  a  director  thus 
qualified  was  incapable  of  acting  on  the  board,  but  as  it 
was  not  shown  affirmatively  that  the  director  in  question 
did  not  also  own  a  beneficial  certificate  no  adverse  ruling 


VOTING  TRUSTS  91 

was  reached  (Venner  v.  Chicago  City  Railway  Co.,  258  111. 
523;  1913). 

So  in  the  case  of  the  Atlantic  and  Pacific,  thirty- 
shares  were  reserved  to  the  Atchison  to  qualify  its 
six  directors,  the  same  number  to  the  Frisco  to  qual- 
ify its  like  quota  of  the  board,  and  five  shares  were  set 
aside  for  use  by  the  voting  trustees  in  qualifying  the 
thirteenth  director.  Strictly,  of  course,  these  qualifying 
shares  may  not  be  represented  by  trust  certificates  ex- 
cept in  such  a  case  as  that  of  the  Indian  Refining  Com- 
pany, and  certainly  should  not  be  considered  available 
for  acquisition  by  the  public.  It  may,  however,  occur  that 
the  voting  trustees  hold  shares  with  respect  to  which  their 
certificates  may  not  be  outstanding  under  the  requirements 
of  the  plan  of  reorganization.  Thus,  in  the  case  of  the  Wis- 
consin Central  trust  of  1899,  the  trustees  held  2333^2  shares 
not  represented  by  trust  certificates;  and  in  the  case  of 
the  Philadelphia  and  Reading  (under  the  amended  plan 
of  December  14,  1886)  more  than  $250,000  of  stock 
was  not  converted  into  voting  trust  certificates  but  was 
for  more  than  five  years  represented  only  by  the  bank- 
ers' certificates  of  deposit. 

As  regards  the  custody  of  the  stock  certificates,  it  may 
be  desirable,  although  not  done  in  the  earUer  important 
trusts,  to  provide  that  a  trust  company  be  designated 
either  by  the  trustees  or  in  the  trust  agreement  as  de- 
positary of  the  stock  held  by  the  trustees.  This  course 
was  natural,  for  instance,  when  the  stock  in  the  Bal- 
timore and  Ohio  owned  by  the  City  of  Baltimore  and 
the  Garretts  was  deposited  with  a  trust  company,  to  be 


92  THE  CONTENTS  OF 

voted  for  three  years  by  the  president  of  the  railroad 
and  his  two  nominees.  In  the  case  of  the  ordinary 
voting  trust  also  it  is  the  preferable  procedure  (North- 
western Elevated;  Louisiana  and  Arkansas;  Long  Island 
Railroad;  Michigan  State  Telephone;  Lehigh  Coal  and 
Navigation;  H-0  Co.;  Loose- Wiles  Biscuit).  A  step 
further  may  be  taken  by  providing  that  the  stock  shall 
actually  be  transferred  into  the  name  of  the  depositary, 
the  Columbia  Trust  Company,  for  instance,  being  the 
record  owner  of  the  trusteed  common  stock  of  the 
California  Petroleum  Company. 

For  simplicity  of  statement,  reference  has  been  made 
to  those  voting  trusts  under  which  the  execution  of  the 
trust  was  imposed  on  individual  trustees.  In  many  in- 
stances (Oregon  Railroad  and  Navigation  Co.;  United 
Cigar  Manufacturers  Co.;  Bath  Portland  Cement  Co.; 
Elhs  Granite  Co.;  Metropolitan  West  Side  Elevated; 
People's  Water)  a  trust  company  has  been  designated 
as  sole  voting  trustee.  When  a  trust  company  thus  has 
the  selection  of  directors,  and  the  exercise  of  other 
powers,  free  from  the  control  of  the  certificate  holders, 
there  is  of  course  lost  all  benefit  incident  to  the  proper  use 
of  judgment  and  discretion  by  selected  individuals,  and 
such  a  trust  cannot  be  designed,  and  cannot  be  ex- 
pected, to  produce  the  results  possible  when  individuals 
are  administering  the  trusts.  More  adequate  results 
are  obtained  under  such  circumstances  by  granting  to 
the  certificate  holders  some  share  in  the  choice  of  di- 
rectors and  in  otherwise  determining  in  what  manner 
the  trustee  shall  vote  the  stock  held  by  it.     This  is 


VOTING  TRUSTS  93 

natural,  as  the  primary  functions  of  a  trust  company  in 
connection  with  a  voting  trust  are  those  of  depositary, 
transfer  agent,  and  registrar  of  transfers,  and  that  of 
agent  of  the  trustees  in  signing  for  them  and  issuing 
trust  certificates. 

The  parties  to  the  agreement  are  the  voting  trustees 
on  the  one  hand,  and,  on  the  other  hand,  may  be  either 
the  reorganization  managers  (Northern  Pacific;  Reading; 
Baltimore  and  Ohio;  Chicago  Great  Western),  or  the 
reorganization  committee  (Erie;  Southern;  Interborough- 
Metropolitan),  or  an  individual  holding  title  to  the 
stock  (International  Harvester)  or  the  several  stock- 
holders (Bankers  Trust).  In  another  form  the  only 
signatory  parties  may  be  the  trustees  themselves  (Gen- 
eral Motors;  Maxwell  Motor),  the  other  parties  being 
such  stockholders  ''as  may  become  parties  to  this  agree- 
ment in  the  manner  hereinafter  provided."  Rarely  the 
company  itself  is  a  party  (Oregon  Railroad  and  Navi- 
gation; Pure  Oil;  Allis-Chalmers;  Philadelphia  Rapid 
Transit),  and  sometimes  the  trust  company  which  serves 
as  depositary  of  the  stock  held  by  the  trustees  (Michigan 
State  Telephone;  California  Petroleum;  Loose- Wiles 
Biscuit).  While  in  a  sense  only  a  declaration  of  trust, 
it  may  be  sufficient  that  the  agreement  should  be  execu- 
ted only  by  the  trustees,  but  where  the  entire  res  of  the 
trust  comes  to  them  in  a  single  transfer  and  with  a  va- 
riety of  limitations  it  is  appropriate,  whether  necessary 
or  not,  that  those  delivering  the  stock  to  the  trustees 
should  actually  be  parties  to  the  agreement. 

Extension  agreements  also  are  usually  signed  in  the 


94  THE  CONTENTS  OF 

first  instance  only  by  the  voting  trustees,  but  that  in 
the  J.  I.  Case  Threshing  Machine  Company  (Novem- 
ber 16,  1914)  for  three  years  was  signed  by  a  single  holder 
of  trust  certificates  as  well  as  by  the  voting  trustees. 

Provision  is  often  made  that  every  stockholder  may 
become  a  party  to  the  agreement  by  exchanging  his 
stock  for  trust  certificates  (Loose- Wiles  Biscuit;  Cali- 
fornia Petroleum),  and  the  propriety  of  this,  aside  from 
any  legal  necessity,  is  obvious.  The  Interborough- 
Metropolitan  voting  trust  of  common  stock,  of  March  6, 
1906,  recited  that  the  preferred  stock  might  also  be 
deposited  thereunder.  As  the  company  stated:  ''This 
provision  is  included  in  said  agreement  for  the  purpose  of 
complying  with  the  provisions  of  the  statute.  It  is  not 
contemplated,  however,  that  preferred  stock  will  be  de- 
posited under  the  voting  trust  agreement."  No  holder 
of  preferred  stock  requested  the  issue  of  voting  trust 
certificates  under  this  agreement,  and  none  was  issued 
with  respect  to  preferred  stock.  After  the  extension 
agreement  of  February  1,  1911,  however,  certificates 
were  promptly  issued  with  respect  to  more  than  a  ma- 
jority of  the  preferred  stock;  but  later  a  large  part,  if 
not  indeed  all,  of  these  preferred  trust  certificates  were 
surrendered  and  stock  certificates  issued  in  place  thereof. 
The  part  of  the  statute  of  New  York  and  Maryland 
applicable  to  the  situation  is  as  follows:  "A  stockholder 
may,  by  agreement  in  writing,  transfer  his  stock  to  any 
persor  or  persons  for  the  purpose  of  vesting  in  him  or 
them  the  right  to  vote  thereon  for  a  time  not  exceeding 
five  years  upon  terms  and  conditions  stated,  pursuant 


VOTING  TRUSTS  95 

to  which  such  person,  or  persons,  shall  act;  every  other 
stockholder,  upon  his  request  therefor,  may,  by  a  like 
agreement  in  writing,  also  transfer  his  stock  to  the  same 
person,  or  persons,  and  thereupon  may  participate  in  the 
tenns,  conditions  and  privileges  of  such  agreement;  .  .  .  ." 
(N.  Y.  Gen.  Corp.  Law,  sec.  25;  M'd  Code,  Art.  23, 
Sec.  102). 

While  the  voting  trust  is  supposed  to  insure  a  contin- 
uous administration  by  a  chosen  group  it  has  nevertheless 
occurred  that  the  control  of  the  company  has  changed 
during  the  term  of  a  voting  trust,  presumably  as  a  result 
of  the  purchase  of  a  sufficient  quantity  of  voting  trust 
certificates  to  entitle  the  new  parties  to  recognition. 
Such  a  transfer  having  been  completed,  it  has  readily 
been  followed  by  the  resignation  in  rotation  of  a  number 
of  the  trustees  and  the  election  to  the  vacancies  of  the 
trustees  representing  the  new  holders  (Seaboard  Air  Line, 
1903;  Kansas  City  Southern,  1900). 

It  may  happen  that,  far  from  the  expected  result  having 
been  attained,  the  company  has  become  further  involved 
and  a  reorganization  has  been  necessary  even  during 
the  term  of  a  voting  trust  (Pope  Manufacturing;  De- 
troit Southern;  International  Mercantile  Marine;  Wis- 
consin Central  Railroad;  New  York,  Pennsylvania  and 
Ohio). 

The  introduction  of  voting  trustees  in  connection  with 
stock  pledged  under  a  collateral  trust  indenture  is  un- 
usual. Such  stock  is  usually  pledged  under  an  agree- 
ment which  provides  that  the  trustees  will  permit  the 
mortgagor  company  to  vote  on  the  stock  so  long  as 


96  THE  CONTENTS  OF 

there  is  no  default  under  the  trust  indenture.  However, 
in  the  Northern  Pacific  collateral  trust  indenture  of 
May  1,  1893,  a  committee  of  five  were  named,  as  voting 
trustees  in  a  limited  sense,  the  trustees  under  the  inden- 
ture agreeing  that  the  sole  power  of  voting  on  the  pledged 
stock  should  remain  in  the  committee  irrevocably,  and 
agreeing  also  on  request  of  the  committee  to  give  proxies 
to  its  nominees,  and  to  assign  certificates  of  stock  for 
the  proper  qualification  of  those  elected  directors.  It 
was  further  provided  that  the  railroad  should  pay  each 
member  of  the  committee  a  fixed  sum  for  attending  each 
meeting  of  the  committee,  and  should  pay  all  the  nec- 
essary disbursements  of  the  committee,  including  the 
salary  of  the  secretary  to  be  appointed  by  the  committee. 
A  somewhat  abnormal  instance  of  a  voting  trust  arose 
in  connection  with  the  New  Orleans  Terminal  Company, 
the  stock  of  which  was  owned  equally  by  the  Southern 
Railway  and  the  St.  Louis  and  San  Francisco  Railroad 
Company.  The  Terminal  Company  leased  its  proper- 
ties jointly  to  the  two  railroad  companies,  each  company 
agreeing  to  pay  one-half  of  the  interest  on  the  Terminal 
Company's  bonds,  and  also  guaranteeing  jointly  and 
severally  such  bonds.  For  mutual  protection  the  two 
railroad  companies  delivered  their  stock,  aside  from 
qualifying  shares,  to  the  Standard  Trust  Company  of 
New  York  (since  merged  in  the  Guaranty  Trust  Com- 
pany) under  a  voting  trust  agreement,  the  trustee  agree- 
ing to  vote  the  stock  as  the  two  companies  jointly  di- 
rected and  also  to  vote  for  three  directors  proposed  by 
each  company.     The  agreement  also  provided  that  if 


VOTING  TRUSTS  97 

either  company  should  default  in  the  payment  of  its 
share  of  interest  under  the  lease,  and  the  default  should 
continue  for  three  months,  the  shares  of  the  company 
so  in  default  should  be  forfeited  to  the  company  not  in 
default.  Such  default  occurring  on  the  part  of  the 
Frisco,  the  receivers  of  that  road  brought  action  to  en- 
join the  voting  trustee  from  transferring  their  portion 
of  the  stock,  and  at  Special  Term  an  injunction  pendente 
lite  was  granted,  the  court  holding  that  this  provision 
of  the  voting  trust  was  really  in  the  nature  of  security 
for  debt  and  that  the  forfeiture  clause  might  on  the 
trial  be  held  to  be  void  {West  v.  Guaranty  Trust  Com- 
pany, New  York  Law  Journal,  Jan.  19,  1914),  but  this 
decision  was  reversed,  however,  at  the  Appellate  Divi- 
sion (162  App.  Div.,  N.  Y.,  301;  1914.) 

Mention  has  not  been  made  of  instances  which  might 
be  termed  testamentary  voting  trusts  (e.  g.,  Florida 
East  Coast  Railway),  or  of  the  many  cases  of  voluntary 
trusts  formed  to  avoid  the  limitations  incident  to  the 
use  of  corporate  forms  (e.  g.,  Chicago  City  and  Connect- 
ing Railways  Collateral  Trust,  New  Hampshire  Electric 
Railways,  Massachusetts  Electric  Companies;  of.,  Mass., 
House  Docs.,  1913,  No.  1788),  or  of  the  smaller  number 
of  what  were  practically  voting  trusts  incident  to  a 
centralization  of  the  control  of  several  corporations 
(e.  g.,  Standard  Oil  Co.;  cf.  Eddy,  Combinations,  Chap. 
16.).  Nor,  indeed,  has  it  seemed  necessary  to  mention 
specifically  many  normal  voting  trusts  which  illustrate 
no  peculiar  feature  of  practice  or  policy. 

The  foregoing  examination  of  many  typical,  and  some 


98  THE  CONTENTS  OF 

unusual,  provisions  of  voting  trust  agreements  may  en- 
able one  to  judge  certainly  as  to  the  reasonabieness 
underlying  their  adoption  and  quite  as  clearly  as  to  their 
propriety.  It  serves  to  illustrate  the  care  and  conserva- 
tism with  which  voting  trusts  have  been  created  under 
the  varying  circumstances  produced  by  corporate  re- 
organizations. The  provisions  reflect,  as  well,  the  under- 
lying purpose  of  such  trusts,  and,  to  some  extent,  the 
probable  results  of  their  use. 

Reorganization  committees  do  not  ordinarily  scheme 
for  any  more  power  than  really  seems  to  them  necessary 
to  carry  into  effect  such  a  plan  as  they  may  vouch  for. 
They  do  not  usually  impose  a  voting  trust  in  order  to 
prolong  their  authority.  Commonly  enough  such  com- 
mittees, and  the  voting  trustees  who  in  a  sense  succeed 
to  their  responsibilities,  are  thankful  indeed  when  their 
work  is  ended,  whether  or  not  it  may  be  really  completed. 
When  they  are  able  to  develop,  or  even  to  satisfactorily 
preserve,  a  valuable  property  burdened  by  its  past,  there 
is  some  occasion  for  appreciation,  although  the  grat- 
itude expressed  by  minority  stockholders  toward  voting 
trustees  is  not  infrequently  that  defined  as  ''an  anticipa- 
tion of  favors  still  to  come."  The  hostility  to  voting 
trusts  has  been  largely  an  incident  of  the  obvious  ease 
with  which  they  have  been  used  as  illustrations  of  the 
supposed  operations  of  a  so-called  "money  trust,"  while 
in  the  criticism  the  other  side  of  the  account  has  been 
obscured  by  rhetorical  excess. 

The  result  of  the  normal  voting  trust  has  been  to  in- 
sure to  a  company  both  stability  and  continuity  of  pol- 


VOTING  TRUSTS  99 

icy,  simple  features  which  are  often  of  substantial  mate- 
rial advantage  to  the  concern  and  to  all  its  stockholders. 
It  provides  certainty  of  really  responsible  management. 
It  makes  impossible  any  disturbing  attempts  at  inter- 
ference by  minority  stockholders,  which  is  a  reasonable 
and  practical  consideration  to  be  recognized  frankly  and 
at  times  properly.  It  concentrates  on  a  small  group  the 
duty  of  putting  a  concern  into  satisfactory  condition, 
giving  them  both  the  legal  power  and  the  moral  obliga- 
tion to  make  a  real  effort  to  that  end.  It  makes  it  pos- 
sible for  those  in  control  to  formulate  a  well  considered 
program  for  the  conduct  of  the  business  with  the  assur- 
ance that  they  may  remain  unhampered  until  the  wis- 
dom, or  futility,  of  their  plans  has  been  demonstrated. 
The  substantial  advantages  which  voting  trusts  have 
produced  certainly  outweigh  any  criticisms  to  which 
they  have  been  subjected,  and  it  is  not  to  be  expected 
that  these  advantages  can  be  successfully  ignored  by  those 
who  would  by  other  methods  give  a  species  of  ''new 
freedom"  to  American  stockholders. 


100  THE  LAW  OF 


III 

THE  LAW  OF  VOTING  TRUSTS 

The  law  relating  to  voting  trusts  was  earlier  some- 
what uncertain,  due  in  part  to  a  lack  of  thoroughness 
and  of  exact  analysis  in  many  of  the  decisions  on  the 
subject,  and  due  also  in  part  to  the  fact  that  in  a  con- 
siderable proportion  of  the  cases,  no  appeal  having  been 
taken,  the  state  of  the  law  rested  on  the  opinion  of  a 
court  of  first  instance.  Suits  involving  the  validity  or 
effect  of  voting  trusts  have  usually  been  commenced 
shortly  before  corporate  elections  and  coupled  with  an 
application  for  an  injunction,  the  decision  on  which  has 
substantially  determined  the  case  so  far  as  the  pending 
election  might  be  concerned,  after  which,  unless  sub- 
stantial interests  were  at  stake,  the  question  at  issue 
in  the  particular  case  has  been  permitted  to  become 
largely  academic.  Thus  in  the  early  litigation  relating 
to  the  voting  trusts  in  the  Cincinnati,  Hamilton  and 
Dayton  and  in  the  Pittsburg  and  Lake  Erie,  no  decision 
by  a  higher  court  was  secured;  the  sequel  in  the  latter 
case  being  the  purchase  of  the  control  of  the  stock  by 
the  Vanderbilt  interests.  In  the  case  of  the  Shepaug 
voting  trust  no  appeal  was  taken,  and  the  refusal  of 
the  courts  to  enjoin  the  Philadelphia  and  Reading  vot- 
ing trustees  from  voting  the  stock  held  by  them  was 


VOTING  TRUSTS  101 

apparently  not  reviewed.  Nevertheless,  questions  re- 
lating to  voting  trusts  have  been  before  the  courts  in 
variety  and  frequency  sufficient  to  produce  a  substan- 
tial body  of  law,  from  a  brief  review  of  which  may  be 
derived  some  principles  familiar  to  lawyers  and  also 
not  beyond  the  experience  of  laymen. 

The  commonest  and  also  the  most  indefinite  test  ap- 
plied to  the  validity  of  a  voting  trust  has  been  its  rela- 
tion to  pubfic  policy.  The  application  of  this  rule  has 
been  as  elastic  as  were  the  earlier  standards  of  equitable 
relief,  while  the  restrictive  force  attributed  to  pubhc 
policy  has  varied  greatly.  On  the  one  hand  is  the  liberal 
doctrine  which  has  been  expressed  by  Justice  Holmes, 
then  Chief  Justice,  as  follows:  ''We  know  nothing  in 
the  policy  of  our  law  to  prevent  a  majority  of  stock- 
holders from  transferring  their  stock  to  a  trustee  with 
unrestricted  power  to  vote  upon  it"  (Brightman  v. 
Bates,  175  Mass.  105;  1900.)  And  so  in  New  Hampshire 
a  voting  trust  was  upheld  with  the  comment  that 
''Judged  by  the  strictest  rule  of  a  stockholder's  right 
to  the  free  and  honest  judgment  of  his  co-stockholders, 
the  agreement  here  made  by  more  than  three-fourths 
of  the  stockholders  is  a  legitimate  arrangement  for 
carrying  out  their  purpose."  After  considering  vari- 
ous cases  on  the  subject,  the  court  commented  as  fol- 
lows: "Even  the  cases  holding  the  particular  agreements 
then  under  consideration  to  be  invalid  usually  recognize 
the  proposition  that  there  may  be  a  valid  voting  trust" 
{Bowditch  V.  Jackson  Co.,  76  N.  H.  351;  1912).  So  in 
a  Vermont  case,  the  court  said:  "The  defendant  says 


102  THE  LAW  OF 

that  the  agreement  referred  to  amounts  to  a  voting 
trust,  and  is  therefore  illegal  and  void.  But  this  result 
does  not  necessarily  follow.  Such  agreements  are  not 
illegal  per  se.  Their  validity  depends  upon  the  purposes 
they  are  designed  to  subserve.  Where  these  purposes 
are  lawful,  stockholders  may,  in  the  absence  of  con- 
stitutional or  statutory  restrictions,  suspend  for  a  time 
the  right  to  vote  their  stock  and  vest  it  in  others  who 
have  a  beneficial  interest  in  it  or  the  corporate  busi- 
ness— as  corporate  creditors  or  a  trustee  for  them" 
{Thompson-Starrett  Co.  v.  Ellis  Granite  Co.,  86  Vt.  282; 
1912). 

This  theory  is  also  thus  expressed:  "There  is  no  stat- 
utory provision,  nor  can  we  perceive  any  reason  offen- 
sive to  public  policy,  preventing  a  stockholder  from 
giving  another  power  over,  or  rights  in,  his  shares  in  a 
corporation  to  the  same  extent  that  he  might  give  in 
any  property"  {Chapman  v.  Bates,  61  N.  J.  Eq.  658; 
1900).  In  citing  this  case,  it  was  later  said,  in  a  minor- 
ity opinion  in  Warren  v.  Pirn  (66  N.  J.  Eq.  353;  1904), 
in  which  however  the  court  was  divided  seven  to  six: 
"It  is  now  settled  by  a  decision  of  this  court  that  pool- 
ing or  combining  of  stock,  where  the  object  is  to  carry 
out  a  particular  policy  with  a  view  to  promote  the  best 
interest  of  all  the  stockholders,  is  not  necessarily  for- 
bidden." The  dissenting  opinion  in  Bridgers  v.  First 
Nat'l  Bank  (152  N.  C.  293;  1910),  states  this  view  of 
the  law  as  follows:  "I  am  of  opinion  that  such  agree- 
ments among  stockholders  of  a  private  corporation  are 
not  per  se  void  or  against  public  policy,  but  that  their 


VOTING  TRUSTS  103 

validity  should  be  determined  by  the  propriety  and 
justness  of  the  ultimate  purpose  which  is  sought  to 
be  accomplished.  This  is  now  the  generally  accepted 
view.  .  .  .  There  is  no  more  objection  to  assigning 
certificates  of  stock  in  a  private  corporation  in  trust  for 
a  lawful  purpose  than  any  other  property."  So  where 
three  stockholders,  together  holding  a  control  of  the 
stock,  agreed  to  vote  all  their  stock  as  a  unit  and  thus 
to  elect  directors  and  officers,  the  agreement  was  held 
not  to  offend  public  policy,  as  the  owners  of  a  majority 
of  the  stock  might  properly  follow  this  course,  their 
purpose  being  honest  and  free  from  fraud  {Faulds  v. 
Yates,  57  111.  416;  1870.  Cf.  Weber  v.  Delia  Mountain 
Mining  Co.,  14  Idaho,  404;  1908). 

The  objection  of  public  policy  was  likewise  raised  in 
the  case  of  Boyer  v.  NesUtt  (227  Pa.  398;  1910),  but 
the  court  upheld  the  agreement  as  containing  ''all  the 
essential  elements  of  an  active  trust."  Repugnance  to 
public  policy  was  also  unsuccessfully  urged  in  connec- 
tion with  the  trust  of  the  stock  of  the  Mobile  and  Ohio 
Railroad  (1879).  For  the  protection  of  the  holders  of 
the  company's  debentures  the  stock  was  deposited  with 
a  trust  company,  to  be  voted  by  it  as  directed  by  a 
majority  of  the  debenture  holders  until  the  debentures 
should  be  paid.  No  more  proper  object  of  a  voting 
trust  may  be  found,  and  it  is  not  surprising  that  the 
court  found  the  agreement  ''not  only  valid  but  fair, 
especially  as  the  stock  had  been  voted  for  thirteen  years" 
{Mobile  &  Ohio  Railroad  Co.  v.  Nicholas,  98  Ala.  92; 
1892).     A  similar  result  has  been  reached  in  California 


104  THE  LAW  OF 

(Smith  V.  S.  F.  &  N.  P.  Ry.  Co.,  115  Cal.  584;  1897), 
where  it  was  said  not  to  be  ''illegal  or  against  public 
policy  to  separate  the  voting  power  of  the  stock  from 
the  ownership.  The  statute  authorizes  the  stock- 
holder to  vote  by  proxy;  ,  .  .  The  right  to  appear  by 
proxy  implies  of  itself  that  the  voting  power  may  be 
separated  from  the  ownership  of  the  stock,  ..."  In 
Virginia  also  a  voting  trust  has  been  held  not  ''viola- 
tive of  the  public  policy"  of  the  state  {Carnegie  Trust 
Co.  V.  Security  Life,  etc.,  Co.,  Ill  Va.  1;  1910).  So  in 
Brown  v.  Pacific  Mail  S.  S.  Co.  (Fed.  Cas.  No.  2025; 
5  Blatch.  525;  1867)  Justice  Blatchford  said:  ''I  am 
unable  to  perceive  anything  in  this  agreement  contrary 
to  public  policy,  or  any  wise  open  to  objection."  x\jid 
to  the  same  general  effect  is  Winsor  v.  Commonwealth 
Coal  Co.  (63  Wash.  62;  1911). 

On  the  other  hand,  the  narrower  theory  is  bluntly 
expressed  as  follows:  "In  short,  all  agreements  and  de- 
vices by  which  stockholders  surrender  their  voting  powers 
are  invalid"  {Harvey  v.  Linville  Improvement  Co.,  118 
N.  C.  693:  1896).  The  trust  agreement  in  this  case, 
which  was  to  be  effective  only  if  executed  by  holders  of 
a  majority  of  the  stock,  was  to  continue  for  five  years 
unless  earlier  terminated  by  the  holders  of  two-thirds 
of  the  stock  deposited,  and  gave  a  majority  of  the  de- 
positors power  to  instruct  the  trustees  how  to  vote,  and 
conferred  on  the  trustees  the  power  to  pledge  the  stock 
for  money  to  be  borrowed  to  pay  the  debts  of  the  com- 
pany. There  was  here  no  impropriety  or  illegality  of 
purpose,  and  yet  the  court  unfortunately  followed  the 


VOTING  TRUSTS  105 

decision  of  Cone  v.  Russell  (48  N.  J.  Eq.  208;  1891),  a 
case  involving  a  clear  illegality  of  purpose,  and  then 
indulged  in  the  extreme  opinion  quoted  above. 

The  Harvey  decision  was  followed  in  Sheppard  v. 
Rockingham  Power  Co.  (150  N.  C.  776;  1909),  a  case  in 
which  the  certificate  holders  had  no  control  over  the 
vote  of  the  trustees,  and  the  court  treated  the  agree- 
ment as  one  depriving  the  stockholders  of  their  right  to 
vote,  and  so  contrary  to  public  pohcy  and  illegal;  and 
was  followed  also  in  Worth  v.  Knickerbocker  Trust  Co. 
(152  N.  C.  242;  1910),  really  a  case  of  illegal  conspiracy 
to  damage  the  plaintiff,  which  assumed  the  law  to  be 
settled  in  that  jurisdiction  and  spoke  of  ''a  voting  trust, 
forbidden  by  the  law."  Stated  otherwise,  it  is  said  to 
be  the  '' universal  policy"  of  the  law  ''that  the  control 
of  the  stock  shall  be  and  remain  with  the  owners  of  the 
stock.  The  right  to  vote  is  an  incident  of  the  ownership 
of  the  stock  and  cannot  exist  apart  from  it."  {Griffith 
V.  Jewett,  15  Week.  Law  Bull,  419;  1886.) 

The  proposition  was  expressed  iu  one  of  several  opin- 
ions in  Warren  v.  Piin  {i\i\  X.  J.  Eq.  353;  1904),  as  fol- 
lows: ''Any  arrangement  that  permanently  separates 
the  voting  power  from  stock  ownership  nullifies,  to  the 
extent  of  the  stock  involved,  the  annual  submission  of 
the  question  of  the  management  of  the  company  to 
the  stockholders.  Where,  as  here,  the  arrangement  in- 
cludes a  majority  of  the  stock,  and  extends  for  a  period 
of  fifty  years,  it  renders  all  annual  elections  in  the 
meantime  a  hollow  form."  The  trust  in  this  case  was 
possibly   void   for   indefiniteness  and   uncertainty,   and 


106  THE  LAW  OF 

presumably  might  have  been  held  voidable  as  broader 
than  the  consents  on  which  it  was  based.  The  opinions 
in  the  case  comprise  quite  as  elaborate  a  discussion  of 
voting  trusts  as  can  be  found  and  naturally  led  to  some 
expressions  which  many  courts  would  consider  too  sweep- 
ing. Thus  it  was  said  that  the  agreement  was  ''not  a 
putting  of  the  shares  in  trust;  it  is  a  putting  of  false 
evidence  of  share  ownership  into  the  hands  of  the  trus- 
tees." It  was  also  suggested  that  the  trust,  not  being 
coupled  with  any  interest  in  the  stock,  was  invalid,  and 
that,  there  being  no  duty  enforceable  upon  the  trus- 
tees, it  was  a  dry  trust;  although  it  had  earlier  been 
suggested  by  Justice  Holmes  (supra):  ''It  might  be  held 
that  the  duty  of  voting  incident  to  the  legal  title  made 
such  a  trust  an  active  one  in  all  cases."  Furthermore, 
Justice  Pitney  considered  the  particular  trust  void  even 
if  the  ultimate  purpose  were  beneficial  to  the  company. 
"In  our  law  the  end  does  not  justify  the  means."  In 
Railway  Co.  v.  State  (49  Oh.  St.  668;  1892),  the  court 
turned  aside  to  remark,  rather  loosely,  that  if  the  agree- 
ment had  vested  the  stock  in  trustees  "with  the  power 
of  voting  it  as  their  interest  may  dictate,  irrespective 
of  the  wishes  or  direction  of  the  owners,"  it  would  have 
been  void  as  in  confhct  with  the  policy  of  the  corpora- 
tion law  of  Ohio. 

The  voting  trust  for  a  period  of  fifteen  years  in 
Bridgers  v.  First  National  Bank  (152  N.  C.  293;  1910), 
was  overthrown  on  the  bald  ground  of  public  policy, 
although  the  court  admitted  that  in  exceptional  cases 
some  good  might  be  accomplished  by  such  agreements. 


VOTING  TRUSTS  107 

"Yet,  in  our  opinion,  the  general  effect  is  vicious  and 
in  contravention  of  a  sound  public  policy."  The 
court's  insistence  on  the  ground  of  public  policy  was 
perhaps  induced  by  its  failure  to  substantiate  the  other 
and  more  technical  grounds  for  the  result  it  reached. 
It  appears  that  in  this  case  the  reason  for  the  creation 
of  the  voting  trust  was  that  there  was  danger  of  the 
bank  falling  under  the  control  of  one  man,  that  appre- 
hension of  this  had  already  led  to  some  loss  both  of 
public  confidence  and  of  deposits,  and  that  the  stock- 
holders were  aroused  to  some  action  to  prevent  such 
danger  becoming  a  fact.  Under  such  circumstances,  if 
under  any,  it  would  seem  that  a  court  might  incline  to 
use  public  policy,  or  pubhc  interest,  as  a  reason  for  up- 
holding such  a  trust. 

So  far  as  such  violation  of  public  policy  is  concerned, 
the  courts  of  North  Carolina  occupy  an  unique  position, 
supported  in  a  degree  by  some  of  the  decisions  in  New 
Jersey,  but  the  great  majority  of  courts  which  have  con- 
sidered the  matter  recognize  that  no  orthodox  rule  of 
public  policy  is  violated  by  the  typical  voting  trust 
agreement. 

Any  review  of  opinions  on  this  branch  of  the  subject 
must  necessarily  verge  on  the  field  of  mere  dicta,  chiefly 
for  the  reason  that  the  type  of  public  policy  invoked  is 
rather  indefinite  and  is  based  on  no  clearly  recognized 
principle  of  law.  As  stated  by  one  author:  "Some  new 
class  must  be  invented,  and  some  new  definition  of 
public  policy  be  found,  before  such  a  voting  trust  can 
be  said  to  fall  within  any  of  the  recognized  rules  which 


108  THE  LAW  OF 

avoid  a  contract  as  being  against  public  policy  "  (Pur- 
dy's  Beach,  Corporations,  sec.  704b).  And,  from  another 
point  of  view,  as  stated  by  Justice  Swayze,  in  Warren 
V.  Pirn  (66  N.  J.  Eq.  353;  1904):  ''many  of  the  argu- 
ments urged  in  favor  of  the  view  that  voting  trusts  are 
contrary  to  public  policy  are  arguments  which  would 
very  properly  be  addressed  to  the  legislature;  ..." 
Naturally,  such  an  agreement  would  fall  if  it  involved 
any  element  which,  on  generally  recognized  principles 
of  law,  and  not  applicable  peculiarly  to  voting  trusts, 
would  render  it  unenforceable. 

The  specific  ground  most  frequently  taken  by  the 
courts  which  hold  voting  trust  agreements  to  be  repug- 
nant to  public  policy  is  that  they  are  illegal  because 
the  voting  power  on  stock  is  separated  from  the  legal 
ownership.  As  stated  by  Greenhood:  ''Any  contract  by 
which  the  owner  of  corporate  stock  deprives  himself  of 
the  important  rights  which  accrue  from  such  ownership 
is  void"  {Public  Policy,  p.  502).  The  commentator 
states  as  a  rule  a  proposition  which  cannot  be  main- 
tained, and  its  fallibility  is  perhaps  suggested  by  the 
fact  that  the  only  case  cited  in  its  support  is  that  of 
Fishery.  Bush  (cf.  p.  121);  although  sufficient  opinions, 
or  dicta,  may  be  cited  both  for  and  against  the  proposi- 
tion, as,  on  one  hand,  Bache  v.  Central  Leather  Co.  (78 
N.  J.  Eq.  484;  1911),  in  which  the  court  said  that  a  con- 
tract for  the  separation  of  the  voting  power  from  the 
ownership  was  "a  gross  violation  of  the  public  policy 
of  this  state." 

It  is  to  be  noted,  however,  that  in  the  typical  voting 


VOTING  TRUSTS  109 

trust  the  legal  title  is  vested  in  the  trustees  who  have 
also  the  voting  power,  and  that  the  so-called  equitable 
owners  are  merely  in  the  position  of  beneficiaries  of  a 
specific  trust  and  have  not,  and  may  not  be  entitled  to, 
any  of  the  incidents  of  legal  ownership.  The  objection 
as  usually  made  thus  has  little  weight.  It  might  have 
weight  in  those  instances,  if  in  any,  in  which  the  voting 
power  of  the  trustees  is  subject  in  some  degree  to  in- 
structions from  their  certificate  holders,  for  in  those  in- 
stances it  might  be  argued  that  the  legal  owners  should 
exercise  completely  and  exclusively  the  voting  power, 
although  the  restriction  arises  from  contract  and  not 
from  any  qualification  of  their  legal  title.  The  criticism 
has  not,  however,  been  judicially  directed  to  those  in- 
stances, probably  for  the  reason  that  the  courts  are  will- 
ing to  attribute  as  many  rights  as  possible  to  the  cer- 
tificate holders  and  therefore  do  not  disapprove  any 
contractual  arrangement  by  which  the  powers  of  the 
certificate  holders  or  ''equitable  owners"  are  increased. 
In  brief,  the  criticism  has  been  expressed  in  cases  to 
which  it  is  not  applicable,  and  has  been  overlooked  in 
considering  cases  to  which,  if  to  any,  it  might  be  deemed 
applicable. 

There  is,  indeed,  some  superficial  inconsistency  in  vest- 
ing the  legal  title  in  trustees  and  at  the  same  time  per- 
mitting them  to  exercise  fully  the  rights  incident  to 
legal  ownership  only  through  a  breach  of  their  trust. 
This  limitation,  however,  seems  to  be  justifiable  on  the 
ground,  as  already  suggested,  that  there  is  nothing 
fundamentally  improper  in  allowing  the  beneficiaries  of 


no  THE  LAW  OF 

the  trust  some  voice  in  the  manner  of  its  administra- 
tion or  in  providing  by  contract  that  the  beneficiaries 
may  to  some  extent  be  enabled  to  instruct  their  trus- 
tees. 

It  has  been  suggested  (10  Harvard  Law  Rev.  428) 
that  if  a  stockholder  may  sell  his  rights  to  prospective 
dividends,  he  may  quite  as  legitimately  sell  the  right  to 
vote  which  is  similarly  incidental  to  his  stock,  although 
the  writer  does  not  there  base  his  approval  of  voting 
trusts  on  any  such  narrow  ground.  And  Justice  Swayze, 
in  Warren  v.  Pirn  (supra),  spoke  of  the  right  to  vote  as 
"si  property  right  and  a  very  valuable  right."  On  the 
other  hand,  the  sale  of  a  stockholder's  right  to  vote  has 
been  treated  as  analogous  to  the  sale  by  a  citizen  of  his 
right  to  vote  at  the  polls,  and  therefore  illegal,  as  in 
Hafer  v.  New  York,  Lake  Erie  and  Western  (14  Weekly 
Law  Bull.  68;  1886),  and  in  Sheppard  v.  Rockingham 
Power  Co.  (150  N.  C.  776;  1909),  but  obviously  the 
franchise  to  vote  is  distinguishable  from  a  contract 
right.     (C/.,  page  113). 

As  to  the  separation  of  the  voting  power  from  the 
legal  ownership,  a  significant  case  is  that  of  Elger  v. 
Boyle  (126  N.  Y.  Supp.  946;  1910),  in  which  a  testator 
directed  that  certain  stock  held  by  his  testamentary 
trustees  should  be  voted  by  them  as  directed  by  six 
persons  named  in  the  will.  On  the  pertinent  branch  of 
the  case  Justice  Bischoff's  opinion  is  as  follows:  "I  find 
no  force  in  the  contention  that  the  trustees,  as  holders 
of  the  stock,  cannot  be  controlled  in  their  manner  of 
voting.     The  power  to  vote  stock  incidental  to  owner- 


VOTING  TRUSTS  111 

ship  of  the  stock  itself  may  not  be  taken  from  the  holder 
in  invitum;  but  he  may  certainly  qualify  his  ownership 
by  his  own  consent  that  another  may  vote  for  him,  as 
in  the  familiar  instance  of  a  vote  by  proxy,  or  may  ac- 
cept the  ownership  with  a  condition  which  involves  this 
consent,  as  here.  These  trustees  become  possessed  of 
the  stock,  not  as  their  own  asset,  but  solely  by  virtue 
of  the  will  and  of  the  conditions  which  the  will  imposed. 
One  condition  involved  their  consent  to  a  restriction  of 
their  voting  power,  and  no  rule  of  law  or  of  public 
policy  is   offended   by  giving  effect   to   that   consent." 

On  the  other  hand,  where  a  will  directed  that  one  of 
three  executors  should  vote  on  certain  stock  and  that 
the  other  executors  should  give  him  a  proxy,  which  they 
refused  to  give,  the  vote  of  the  single  executor  was  re- 
jected, as  the  legal  title  was  in  the  three  and  a  proxy  to 
one  of  the  three  could  not  be  created  by  will.  ''The 
right  of  voting  stock  is  inseparable  from  the  right  of 
ownership.  The  one  follows  as  a  sequence  from  the 
other,  and  the  right  to  vote  cannot  be  separated  from 
the  ownership,  without  the  consent  of  the  legal  owner" 
{Tunis  V.  Hestonville,  etc.,  R.  R.  Co.,  149  Pa.  70;  1892). 

The  separation  of  the  voting  power  from  the  owner- 
ship of  stock  is  perhaps  deemed  improper  from  a  too 
high  regard  for  the  early  history  of  corporations.  The 
king's  grant  of  a  corporate  charter  was  to  his  "trusty 
and  well  beloved"  grantees,  but  the  personal  unportance 
of  the  proprietors,  perhaps  even  then  somewhat  ficti- 
tious, has  no  counterpart  to-day  in  the  relation  to  a  sec- 
retary   of   state    of    the   modern    incorporators.      The 


112  THE  LAW  OF 

''trusty  and  well  beloved"  were  supposed  to  vote  in 
person,  if  at  all;  and  only  gradually  were  they  enabled 
temporarily  to  grant  the  voting  power  to  others  as  the 
proxy  was  imposed  on  the  common  law.  The  extension 
of  the  statutory  recognition  of  the  proxy  has  been  fol- 
lowed by  its  quite  universal  introduction  and  its  actual 
use  in  many  cases  by  those  having  no  relation  to  the 
stockholder  except  that  created  from  time  to  time  by 
the  proxy.  Under  such  circumstances  the  voting  power 
is  often  even  more  blindly  alienated  than  is  possible 
under  the  terms  of  a  voting  trust. 

In  passing  on  the  accuracy  of  the  proposition  that 
there  may  be  a  separation  of  voting  power  from  the 
ownership  of  stock,  attention  should  be  called  to  the 
practice  of  denying,  for  instance,  to  one  class  of  stock 
any  voting  rights,  a  provision  "which  does  not  concern 
the  public  and  does  not  violate  any  rule  of  the  common 
law  or  any  rule  of  public  policy "  (People  v.  Koenig, 
133  App.  Div.  N.  Y.  756;  1909),  as  well  as  the  many 
instances  in  which  corporations  have  also  legally  issued 
stock  deprived  conditionally  of  voting  power,  and  those 
instances  in  which  the  voting  power  has  been  tempo- 
rarily taken  from  outstanding  stock,  as  at  the  time  of  the 
dissolution  of  the  so-called  ''powder  trust." 

Even  assuming  that  the  legal  title  to  the  stock  remains 
in  the  original  owners,  an  assumption  which  can  be  main- 
tained only  with  some  difficulty,  nevertheless  there  is 
ample  authority  for  the  proposition  that  stockholders  may 
transfer  their  voting  powers  to  others  by  a  contract  en- 
during for  a  longer  period  than  might  a  statutory  proxy. 


VOTING  TRUSTS  113 

Whether  a  practice  or  an  agreement  is  in  conflict  with 
pubhc  poHcy  is  doubtless  to  be  determined  by  tests 
which  may  vary  from  time  to  time.  Subject  to  such 
fluctuating  tests  must  be  considered,  for  instance,  the 
proposition  that  only  the  real  owner  of  stock,  or  his 
proxy,  should  vote  upon  it.  Doubtless  in  the  early 
history  of  corporations  the  implied  agreement  was  under- 
stood to  be  that  each  stockholder  should  vote  person- 
ally if  at  all,  while  voting  by  proxy  was  not  recognized 
as  a  common  law  right  and  only  later  was  introduced 
gradually  by  special  provisions. 

While  one  may  not  sell  one's  proxy  {e.  g.,  N.  Y.,  Gen. 
Corp.  Law,  sec.  23;  Penal  Law,  sec.  668),  there  is  no  illegal- 
ity in  one's  selling  or  disposing  of  one's  stock,  subject  to  its 
reacquisition  on  certain  conditions,  and  permitting  the 
vendee,  assignee  or  holder  as  legal  owner  in  the  meantime 
to  vote  on  the  stock.  If  to  permit  this  infringes  public 
policy,  it  is  questionable  whether  the  practice  is  not  so 
general,  in  one  form  or  another,  as  really  to  evidence  a 
change  in  public  policy,  and  to  require  some  qualifica- 
tion of  decisions  which  have  purported  to  express  the 
public  policy  of  an  earlier  period. 

Bankers  and  brokers  are  to-day  the  record  owners  of 
large  amounts  of  stock,  holding  them  either  assigned  in 
blank  or  not,  the  equitable  title  to  which,  either  free  or 
encumbered,  rests  in  their  clients  or  customers  who  per- 
mit the  stock  to  be  voted  by  those  having  its  temporary 
possession  and  standing  for  convenience  in  their  names 
as  such  record  owners.  In  fact,  it  is  probably  true  that 
at  the  stockholders'  meetings  of  many  large  corporations 


114  THE  LAW  OF 

much  stock  is  thus  improperly  voted,  according  to  the 
earUer  tests.  Yet  it  is  difficult  to  define  the  public 
policy,  if  any,  which  is  by  this  fact  alone  violated. 
There  is  no  duty  unfulfilled,  for  there  is  no  obligation 
to  vote.  There  is  no  duty  improperly  performed,  for  if 
the  unregistered  equitable  owner  attempted  to  vote  his 
offer  would  under  normal  circumstances  be  declined. 
A  stockholder  cannot  compel  other  stockholders  to  vote, 
if  they  do  not  choose  to  do  so;  and  he  cannot  require  a 
change  in  the  registration  in  others'  certificates  to  con- 
form to  what  he  believes  to  be  the  fact  as  to  equitable 
ownership.  And  as  regards  the  corporation,  its  registry 
of  stockholders  is  ordinarily  conclusive  as  to  the  identity 
of  the  owner  of  the  stock. 

A  case  in  point  arises  from  the  common  procedure  of 
closing  the  transfer  books  of  a  corporation  for  a  certain 
number  of  days  prior  to  a  stockholders'  meeting,  with 
the  practical  result  that  stockholders  of  record  may 
vote  at  a  stockholders'  meeting  who  may  have  ceased 
to  be  actual  stockholders  by  selling  their  stock  prior  to 
the  meeting  and  after  the  closing  of  the  transfer  books. 
The  effect  of  this  practice,  embodied  in  statute  in  a  few 
states,  was  emphasized  in  the  case  of  Bache  v.  Central 
Leather  Co.  (78  N.  J.  Eq.  484;  1911),  by  the  fact  that  the 
complainants  owned  stock,  purchased  after  the  books 
closed,  on  which  of  course  they  were  unable  to  vote  and 
which  was  in  fact  probably  voted  against  them. 

In  connection  with  the  same  subject,  attention  may 
be  called  to  the  fact  that  in  the  past,  as  now,  large 
blocks  of  American  stocks  were  so  held  abroad  that  the 


VOTING  TRUSTS  115 

voting  power  was  separated  from  what  some  would 
probably  call  the  legal  ownership.  Thus,  of  large  Amer- 
ican issues  earlier  held  in  England,  it  was  at  one  time 
estimated  that  probably  less  than  five  per  cent,  were 
registered  in  the  names  of  the  actual  owners.  As  some 
of  these  stocks  did  not  then  pay  dividends,  it  simply 
amounted  at  that  time  to  an  abandonment  of  the  right 
to  vote,  the  successive  purchasers  not  troubling  to  have 
the  stock  properly  transferred  on  the  books  of  the 
companies.  Later,  as  some  of  these  stocks  began  to 
pay  dividends,  the  obvious  desirability  of  sending  the 
certificates  to  this  country  for  registration  occasioned 
much  inconvenience.  In  addition  to  this  circumstance, 
it  had  even  then  been  customary  to  send  such  American 
stocks  abroad  principally  in  ten  share  certificates, 
which,  once  endorsed  in  blank,  were  transferred  repeat- 
edly by  delivery;  but  this  practice  was  abandoned  in 
England  as  the  result  of  a  holding  that  such  certificates 
were  not  negotiable  instruments  {e.g.,  London  &  County 
Banking  Co.  v.  London  &  River  Plate  Bank,  20  Q.  B.  D. 
232;  1887). 

These  two  factors  seem  to  have  led  to  the  adoption 
by  the  English  of  the  practice,  already  known  in  Hol- 
land, by  which  large  blocks  of  stock  were  registered  in 
the  name  of  some  "administration,"  association  or 
trust,  which  in  turn  issued  its  certificates  (either  of  its 
own  stock  or  of  beneficial  interest  in  the  particular 
securities  held  by  it)  in  smaller  denominations  and 
these  latter  served  the  purpose  of  local  trading  (c/.,  e.  g., 
4  Rlwy.  &  Corp.  L.  J.  47;  5  ibid.  290).    The  individuals 


116  THE  LAW  OF 

whose  money  was  invested  in  these  American  securities 
had  no  power  of  voting  on  the  stock  itself,  and  often  had 
not  even  the  power  of  stockholders  in  a  "holding" 
company.  It  may  be  chiefly  for  reasons  of  practical 
convenience  that  this  system  has  continued  to  prevail, 
and  yet,  with  such  complete  separation  of  voting  power 
from  the  equitable  interest,  it  is  quite  as  obnoxious  to 
the  earlier  ''public  policy"  as  any  voting  trust.  Cer- 
tain it  is,  in  any  event,  that  stock  in  large  amounts  and 
on  frequent  occasions  has  been  voted  by  those  who,  al- 
though owners  of  record,  have  had  no  real  interest  in 
the  stock  itself,  and  in  some  instances  have  served 
merely  as  agents  for  the  collection  of  dividends. 

Likewise,  for  instance,  a  large  amount  of  stock  of  an 
American  corporation  once  stood  in  the  name  of  a 
domestic  trust  company,  against  which  stock  the  trust 
company  issued  its  certificates  of  interest,  for  one  share 
each,  for  distribution  abroad.  Mention  should  also  be 
made  of  the  unique  arrangement  in  the  voting  trust  of 
the  Oregon  Railroad  and  Navigation  Company  (Au- 
gust 19,  1896),  by  which  the  so-called  equitable  owner 
of  the  stock  might  be  removed  a  further  degree  from 
the  legal  title.  Under  this  agreement  substantially  all 
the  stock  was  held  by  the  Central  Trust  Company  of 
New  York,  which  issued  the  usual  stock  trust  certifi- 
cates. Then,  as  it  was  anticipated  that  these  trust  cer- 
tificates would  in  some  measure  be  held  by  residents  of 
Massachusetts  and  Germany,  it  was  provided  that 
the  owners  might  deposit  their  trust  certificates  with 
either  the  Old  Colony  Trust  Company  of  Boston  or  the 


VOTING  TRUSTS  117 

Deutsche  Treuhand-Gesellschaft  of  Berlin,  and  receive 
in  return  a  trust  certificate  from  one  of  these  concerns, 
entitling  the  depositor  to  receive  on  its  surrender,  not 
a  certificate  of  stock,  but  a  corresponding  trust  certifi- 
cate in  the  fomi  issued  by  the  Central  Trust  Company. 

These  instances  have  not  been  deemed  to  offend  the 
public  policy  of  the  time,  but  have  rather  emphasized 
the  fact  that  in  this  regard  the  public  policy  of  the  law 
may  well  be  detennined  by  the  course  of  actual  busi- 
ness requirements.  In  brief,  however,  it  is  to  be  borne 
in  mind  that  in  the  typical  voting  trust  there  arises  no 
question  of  any  separation  of  voting  power  from  owner- 
ship for  the  simple  reason  that  the  legal  title  to  the 
stock  is  in  the  trustees,  who  have  been  recognized,  for 
instance,  as  the  *' absolute  owners  of  the  stock." 

Reference  has  already  been  made  to  the  statutes  of  New 
York  and  Maryland  permitting  voting  trusts,  which  are  a 
vConclusive  answer  to  the  argument  that  a  voting  trust  is 
contrary  to  public  policy.  At  the  same  time  such  statutes 
tend  10  regulate  the  use  of  a  voting  trust  by  two  important 
requirements.  A  duphcate  of  every  voting  trust  agree- 
ment must  be  filed  in  the  corporation's  principal  office, 
where  any  stockholder  may  inspect  it;  and,  secondly,  any 
stockholder  not  a  party  to  the  agreement,  as  already 
pointed  out,  may  subject  his  stock  to  such  agreement  and 
participate  in  it  practically  as  if  an  original  depositor. 
There  is  thus  prevented  an  "inside"  voting  trust,  and 
there  is  also  avoided,  as  far  as  stockholders  are  concerned, 
a  secret  voting  trust.  As  a  matter  of  fact,  it  is  now  quite 
rare  that  a  secret  voting  trust  is  created,  even  outside  of 


118  THE  LAW  OF 

the  states  mentioned,  while  it  is  usually  deemed  of  no 
particular  advantage  to  attempt  to  exclude  any  stock- 
holders from  joining  in  a  voting  trust  if  they  care  to  do  so. 
Although  the  importance  of  these  two  features  of  the 
statutes  is  not  to  be  underestimated,  yet  most  bankers 
would  certainly  be  disposed  to  comply  with  their  object 
even  without  the  compulsion  of  law. 

The  fundamental  importance  of  the  statutes  lies  in  the 
definite  recognition  of  the  propriety  of  voting  trusts.  One 
question,  however,  left  open  by  the  statute,  arises  from  its 
apparent  ambiguity  in  stating  that  stockholders  may  enter 
into  a  voting  trust  agreement  "for  a  time  not  exceeding 
five  years,"  a  provision  which  by  some  seems  to  have 
been  interpreted  as  reading  that  stockholders  may  not 
enter  into  such  an  agreement  for  a  time  exceeding  five 
years.  The  practical  result  has  been  that  most  voting 
trusts,  drawn  with  the  provision  in  view,  have  been  either 
absolutely  for  a  term  not  to  exceed  five  years  or  for  a  term 
of  five  years  and  an  additional  indefinite  period  usually 
terminable  upon  the  happening  of  some  specified  con- 
tingency. The  latter  and  broader  interpretation  of  the 
statute  would  seem  reasonable  if  any  weight  is  to  be  given 
to  the  statute  of  1885  (c/.,  page  62)  as  indicating  the 
legislative  policy  of  New  York  in  this  respect. 

The  complete  text  of  the  New  York  statute  on  the 
subject  {Laws  of  1901,  chap.  355;  followed  in  Maryland, 
Laws  of  1908,  chap.  240)  is  as  follows: 

"A  stockholder  may,  by  agreement  in  writing,  transfer 
his  stock  to  any  person  or  persons  for  the  purpose  of  vest- 
ing in  him  or  them  the  right  to  vote  thereon  for  a  time  not 


VOTING  TRUSTS  119 

exceeding  five  years  upon  terms  and  conditions  stated, 
pursuant  to  which  such  person  or  persons  shall  act;  every 
other  stockholder,  upon  his  request  therefor,  may,  by  a 
Hke  agreement  in  writing,  also  transfer  his  stock  to  the 
same  person  or  persons  and  thereupon  may  participate 
in  the  terms,  conditions  and  privileges  of  such  agreement; 
the  certificates  of  stock  so  transferred  shall  be  surrendered 
and  cancelled  and  certificates  therefor  issued  to  such 
transferee  or  transferees  in  which  it  shall  appear  that  they 
are  issued  pursuant  to  such  agreement  and  in  the  entry 
of  such  transferee  or  transferees  as  owners  of  such  stock 
in  the  proper  books  of  said  corporation  that  fact  shall  also 
be  noted  and  thereupon  he  or  they  may  vote  upon  the 
stock  so  transferred  during  the  time  in  such  agreement 
specified;  a  duplicate  of  every  such  agreement  shall  be 
filed  in  the  office  of  the  corporation  where  its  principal 
business  is  transacted  and  be  open  to  the  inspection  of 
any  stockholder,  daily,  during  business  hours"  {Gen. 
Corp.  Law,  sec.  25). 

Courts  have  held  voting  trusts  to  be  void,  or  have 
refused  to  enforce  rights  asserted  under  them,  as  they 
have  done  in  the  case  of  ordinary  contracts,  when  the 
object  or  the  consideration  of  the  agreement  has  been 
illegal.  This  result  has  been  reached  for  a  variety  of 
reasons. 

Thus  in  Cone  v.  Russell  (48  N.  J.  Eq.  208;  1891), 
one  of  the  parties  secured  proxy  rights  for  a  period  of 
five  years  in  all,  which  would  give  him  control  of  the 
stock,  for  the  consideration  that  he  would  cause  such  a 
board  of  directors  to  be  elected  as  would  employ  one  of 


120  THE  LAW  OF 

the  parties  to  the  contract  as  manager  for  five  years  at 
a  stipulated  salary.  If  the  object  had  been  a  proper  one, 
and  in  any  sense  directed  toward  the  advantage  of  the 
corporation  or  of  its  stockholders  at  large,  the  court 
would  doubtless  have  approved  the  arrangement,  as  it 
recognized  that  ''the  propriety  of  the  object  validates 
the  means."  So,  a  pool  of  a  majority  interest  in  stock, 
for  the  purpose  of  insuring  among  the  parties  an  agreed 
division  of  the  places  on  the  board,  was  held  void  and 
against  public  policy;  and  the  court  consistently  de- 
clined to  aid  the  plaintiff  in  enforcing  rights  alleged  to 
have  been  violated  by  a  breach  of  the  agreement 
(Bridgers  v.  Staton,  150  N.  C.  776;  1909).  However, 
where  the  plaintiffs  owned  the  entire  stock  of  a  corpora- 
tion and  sold  a  controlling  interest  to  the  defendants, 
a  contract  by  which  the  parties  agreed  that  the  plain- 
tiffs should  retain  their  offices  and  salaries  for  five  years 
was  upheld,  the  court  considering  that  the  purchase 
price  might  practically  be  paid  in  part  by  this  method, 
particularly  as  the  holders  of  the  entire  stock  were 
parties  to  the  agreement  and  "no  one  else  could  com- 
plain" (Katzler  v.  Bensinger,  214  111.  589;  1905). 

So,  one  stockholder  may  not  sell  his  stock  coupled 
with  an  agreement  that  the  vendee  be  appointed  to  a 
certain  office  with  a  stated  salary  (Fennessy  v.  Ross, 
5  App.  Div.  N.  Y.  342;  1896;  Guernsey  v.  Cook,  120 
Mass.  501 ;  1876) ;  nor  may  the  holders  of  a  majority  of  the 
stock  agree  in  bad  faith  to  control  the  board  and  raise  their 
own  salaries  (Snow  v.  Church,  13  App.  Div.  N.  Y.  108; 
1897).     The  same  result  was  reached  where  the  princi- 


VOTING  TRUSTS  121 

pal  object  was  to  secure  the  control  of  a  corporation, 
and  while  a  contract  for  the  purchase  of  stock  for  such 
a  purpose  may  not  be  necessarily  void,  yet  the  court 
doubted  whether  ''sound  public  policy"  demanded  that 
it  should  aid  the  parties  to  such  a  contract  by  a  degree 
of  specific  performance  {Gage  v.  Fisher,  5  N.  D.  297; 
1895). 

Illegality  involving  a  restraint  of  trade  was  the  basis 
of  condemning  the  agreement  in  the  Genesee  Valley 
Canal  Railroad  Company  {Fisher  v.  Bush,  35  Hun,  641 ; 
1885),  which  was  held  to  be  "not  such  and  so  limited 
as  to  time  and  place  as  not  to  be  condemned  as  against 
public  policy."  The  agreement  was  also  held  void  be- 
cause not  based  on  a  real  and  special  consideration, 
and  also  because  of  the  "pernicious  and  unlawful  pro- 
vision" by  which  the  parties  agreed  to  vote  in  person 
and  not  by  proxy.  Had  the  technical  details  been  ade- 
quately provided  for,  it  would  seem  that  the  agreement 
might  have  been  upheld,  as  its  express  purpose  was  to  pre- 
vent a  sale  of  the  company's  franchise  by  a  majority  of  the 
directors  who  represented  only  a  minority  of  the  stock. 
The  element  of  restraint  of  trade  may  naturally  figure 
also  in  those  voting  trusts  whose  effect  is  to  subject  one 
corporation  to  the  control  of  another,  as  in  the  Cin- 
cinnati, Hamilton  and  Dayton  cases,  and  also  in  such 
trusts  as  that  of  the  Standard  Oil,  and  this  element 
alone  might  render  probable  the  overthrow  of  such  a 
trust.  Thus,  in  Hafer  v.  New  York,  Lake  Erie  and 
Western  (14  Weekly  Law  Bull.  68;  1886)  the  fundamental 
objection  was  raised  that  the  trust  had  the  effect  of 


122  THE  LAW  OF 

putting  the  company  into  the  control  of  the  Erie,  which 
was  alleged  to  be  beyond  the  legal  power  of  the  Erie, 
and  that  the  stockholders  improperly  attempted  "to 
confer  their  rights  to  vote  upon  the  directors  of  an- 
other company." 

So  also,  if  the  trust  agreement  is  interpreted  as 
creating  an  illegal  restraint  on  the  power  of  alienation 
it  will  not  be  enforced.  Thus  where  the  stock  was 
absolutely  tied  up  although  only  for  six  months,  it  was 
held  that  the  agreement,  "ii  not  void  as  being  contrary 
to  the  statute,  is  certainly  unenforceable  as  against 
public  policy"  {Williams  v.  Montgomery,  68  Hun,  N.  Y. 
416;  1893).  The  court  continued:  ''Persons  cannot 
agree  to  surrender  the  control  and  ownership  of  prop- 
erty belonging  to  them  for  a  definite  period,  and  enforce 
such  an  agreement  in  any  court  of  justice."  A  similar 
result  was  reached  in  Sullivan  v.  Williams  (69  App.  Div. 
N.  Y.  221;  1902),  where  the  possible  duration  of  absolute 
inalienability  was  fifteen  years.  But  the  decision  in 
Williams  v.  Montgomery  was  later  modified  (148  N.  Y. 
519;  1896),  and  under  the  facts  it  was  found  that  there  was 
no  unlawful  suspension,  and  the  rule  on  the  subject  was 
there  quite  clearly  stated.  In  the  case  of  Moses  v.  Scott 
(84  Ala.  608;  1887),  the  stock  had  been  subjected  to  a 
three-year  trust,  each  party  also  giving  to  the  other  par- 
ties a  refusal  on  the  stock.  One  of  the  parties  sold  his 
stock,  and  the  vendee  sought  to  vote  on  it.  The  other 
parties  sought  an  injunction  restraining  the  vendee  from 
voting,  but  the  court  held  that  it  would  not  aid  the  enforce- 
ment of  the  contract,  as  it  was  a  "palpable  restraint  on  the 


VOTING  TRUSTS  123 

alienation  of  property,"  although  the  court  admitted  that 
there  was  nothing  per  se  illegal  in  the  arrangement  since 
it  was  possibly  not  so  binding  as  to  prevent  a  with- 
drawal of  deposited  stock;  in  other  words,  it  was  treated 
really  as  a  case  like  those  decided  on  the  theory  of  a 
revocable  proxy. 

The  stock  trust  of  1877  as  to  the  Pittsburg  and 
Lake  Erie  Railroad,  being  expressed  in  terms  to  give 
the  trustees  a  perpetual  control  of  the  voting  power,  was 
held  by  the  court  to  be  against  public  policy  as  depriving 
the  owner  of  his  voting  rights;  the  court  assuring  the 
result  desired  by  the  plaintiff  by  holding  that,  if  the 
position  stated  was  wrong,  the  agreement  at  most  con- 
stituted only  a  revocable  proxy  {Vanderbilt  v.  Bennett, 
2  Rlwy.  &  Corp.  L.  J.  409;  1887).  The  case  naturally 
afforded  a  better  basis  of  attack  on  the  ground  of  ef- 
fecting a  perpetual  restraint  on  the  power  of  alienation. 
The  voting  trust  in  the  Wisconsin  Central  Company 
was  submitted  to  a  high  authority  on  perpetuities  and 
held  to  be  free  from  objections  on  the  ground  of  re- 
moteness (Purdy's  Beach,  Corporations,  1905  ed., 
p.  1039). 

Restraint  on  competition  {Clarke  v.  Central  R.  R.  &  B. 
Co.,  50  Fed.  338;  1892)  and  an  agreement  for  secret  profits 
{Shepaug  Voting  Trust  Cases,  60  Conn.  553;  1890),  have 
also  been  advanced  as  reasons  for  not  upholding  a  voting 
trust. 

And  so  indefiniteness  of  duration  was  an  insuperable 
objection  in  Morel  v.  Hoge  (130  Ga.  625;  1908),  the 
agreement  in  which,  between  two  groups  of  stockholders, 


124  THE  LAW  OF 

gave  to  one  group  owning  exactly  one-half  of  the  stock 
the  right  to  name  indefinitely  a  majority  of  the  board. 
The  contract  was  held  to  be  against  public  policy,  and 
as  one  of  the  group  in  power  sold  some  of  the  stock, 
the  agreement  was  thereafter  held  bad  because  it  was 
designed  indefinitely  to  deprive  the  owners  of  a  majority 
of  the  stock  from  controlling  the  corporation.  Indef- 
initeness,  not  of  duration  but  of  the  material  terms  of 
the  trust,  was  apparently  a  sufficient  reason,  if  others 
had  not  been  advanced,  for  setting  aside  the  trust  in 
Warren  y.  Pirn  (supra). 

Perhaps  the  most  elusive  objection  to  the  enforceabil- 
ity of  voting  trusts  is  that  which  rests  on  the  theory  that 
such  a  trust  is  nothing  more  than  a  collective  proxy,  and 
revocable  as  is  any  proxy.  If  this  theory  were  correct, 
the  many  statutes  limiting  the  effective  duration  of  a 
proxy  would  also  operate  to  render  totally  ineffective  a 
voting  trust,  for  while  less  than  half  the  states  prescribe 
a  limit  for  the  life  of  a  proxy  yet  that  limit  varies  from 
seven  years  to  as  short  a  period  as  thirty  days.  Those 
who  suggest  an  analogy  between  a  proxy  and  a  voting 
trust  agreement  ignore  certain  fundamental  differences 
between  them.  The  usual  proxy  merely  establishes  a 
relation  of  principal  and  agent  terminable  by  the  prin- 
cipal at  will  either  through  revocation  or  through  sale 
of  his  stock.  The  voting  trust  agreement  vests  in  the 
trustees  an  interest  in  the  stock  which  the  original  owner 
obviously  is  unable  to  nullify  by  any  sale  of  stock  and 
which  he  cannot  otherwise  cancel  except  through  an 
attempted  breach  of  contract.     The  holder  of  a  proxy 


VOTING  TRUSTS  125 

has  no  control  over  the  stock  itself,  while  the  voting 
trustees  have  the  possession  of  the  stock  as  well  as  the 
legal  title  to  it.  The  proxy  creates  a  relation  of  a 
temporary  character  under  a  restrictive  statutory  au- 
thority; the  voting  trust  is  created  without  the  need  of 
statutory  license  and  confers  not  a  revocable  authority 
upon  an  agent  but  a  qualified  title  upon  a  transferee  of 
property. 

To  permit  the  disruption  of  a  voting  trust  on  the 
ground  that  it  constitutes  only  a  revocable  power  has 
been  readily  possible  in  those  instances  in  which  the 
agreement  has  been  held  to  constitute  a  ''dry"  trust 
(e.  g.,  Commonwealth  v.  Roydhouse,  233  Pa.  234;  1911); 
and  in  some  cases  in  which  the  agreement  has  been 
sustained  it  has,  nevertheless,  been  held  that  the  agree- 
ment was  revocable  to  the  extent  that  any  depositor 
might  withdraw  his  stock  {Woodruff  v.  Dubuque  and 
Sioux  City  R.  R.  Co.,  19  Abb.  N.  C.  437;  1887;  Moses  v. 
Scott,  84  Ala.  608;  1887).  In  the  usual  case,  however, 
this  theory  is  not  to  be  deemed  properly  available  for 
the  purpose  of  overthrowing  such  a  trust. 

The  ''active"  feature  of  the  trust  may  be  emphasized, 
and  the  element  of  legal  consideration  adequately 
founded,  by  showing  that  the  trust  is  for  the  benefit 
of  others  as  well  as  of  the  depositing  stockholders. 
Thus,  in  one  instance,  the  company  planned  to  issue 
$10,000,000  bonds  and  the  trust  agreement  recited  that 
"to  induce  bankers  to  purchase  said  bonds  it  is  found 
necessary  for  the  protection  of  their  interests  that  a 
majority  of  the  capital  stock  of  the  company  be  de- 


126  THE  LAW  OF 

posited  with  the  voting  trustees  for  a  period  of  five 
years ;  .  .  . "  (Philadelphia  Rapid  Transit  Co. ;  c/.  page  16) . 

And  so,  if  such  course  be  found  necessary  in  order  to 
secure  a  loan,  the  stockholders  may  ''vest  the  manage- 
ment of  the  corporation  in  hands  satisfactory  to  the 
lenders  and  for  a  term  commensurate  with  the  loan," 
without  violating  public  policy,  as  intimated  by  Justice 
Swayze  in  Warren  v.  Pirn  (66  N.  J.  Eq.  353;  1904). 

It  has  been  said  that  the  "only  purpose  regarded  as 
lawful  by  the  courts  is  the  protection  of  the  security  of 
the  lien  holders"  (36  Amer.  Law  Rev.  222).  The 
absence  of  this  element  was  not  the  reason  for  the  con- 
demnation of  the  trust  in  any  of  the  cases  cited  by  the 
writer,  and  it  may  well  be  questioned  whether  to-day 
the  courts  would  insist  on  this  narrow  doctrine  in  order 
to  uphold  a  trust  as  "active."  This  detail  was,  however, 
adverted  to  in  the  litigation  over  the  Philadelphia  and 
Reading  trust  of  1887,  the  court  stating  that  the  voting 
trustees  represented  "not  only  the  shareholders,  but 
also  the  other  creditors"  {Shelmerdine  v.  Welsh,  7 
Rlwy.  &  Corp.  L.  J.  87;  1890),  and  it  is  obvious  that 
many  voting  trusts  have  been  created  primarily  in  the 
interest  of  security  holders.  In  the  early  trusts  the 
trustees,  to  be  sure,  did  little  else  than  vote  for  directors, 
and  the  terms  of  the  trust  were  correspondingly  brief 
and  indeed  incomplete;  so  that  in  not  a  few  instances  the 
arrangement  might  well  have  been  held  to  constitute 
technically  an  inactive  trust.  Reorganization  agree- 
ments now  usually  set  forth  the  facts  of  the  situation 
plainly  enough  to  indicate  that  the  proposed  trust  is 


VOTING  TRUSTS  127 

such  as  to  be  an  "active"  trust,  although  these  details 
are  often  inadvertently  omitted  from  the  recitals  of  the 
trust  agreement  itself.  As  a  matter  of  fact  the  trust  is 
frequently  for  the  benefit  of  security  holders,  whether 
technically  so  expressed  or  not,  and  as  well  is  generally 
for  the  benefit  of  all  stockholders;  and  there  should 
seldom  be  any  difficulty  in  so  framing  the  agreement  as 
to  obviate  any  objection  on  the  ground  that  it  creates 
merely  a  "dry"  trust. 

Another  objection  has  been  at  times  raised  with 
respect  to  the  insufficiency  of  consideration  underlying 
the  agreement.  The  mutual  promises  of  the  depositors 
have  been  held  by  some  not  to  constitute  an  effective 
consideration,  while  others,  probably  with  more  technical 
accuracy,  have  held  such  to  be  a  valid  form  of  con- 
sideration. In  any  event,  while  this  question  is  one  of 
the  general  law  of  contracts  and  not  peculiar  to  the  law 
of  voting  trusts,  it  is  quite  common  to  find  in  a  voting 
trust  agreement  some  consideration,  either  express  or 
implied,  other  than  the  mutual  promises  of  the  de- 
positors or  their  concurrent  action  in  actually  transfer- 
ring their  stock. 

The  legality  of  voting  trusts  of  stock  of  corporations 
organized  under  general  corporation  laws  may  well  be 
questioned  if  their  terms  contravene  the  principles 
already  suggested,  although  if  the  attack  is  based  on  the 
more  indefinite  ground  of  public  policy  some  security 
may  be  gained  by  including,  and  having  accepted  by  the 
authorities,  appropriate  provisions  in  the  company's 
certificate  of  incorporation,  as  in  the  cases  of  the  New 


128  THE  LAW  OF 

York,  Lake  Erie  and  Western  and  the  Consumers'  Gas 
Trust  (c/.  pages  60,  61).  The  example  might  also  be 
followed  of  the  Distillers  Securities  Corporation,  the 
charter  of  which  provided:  ''The  holders  of  all  or  any 
part  of  the  shares  of  the  capital  stock  of  the  corporation 
shall  have  the  right  from  time  to  time  at  their  discretion 
to  create  and  form  a  voting  trust."  Such  a  provision 
might  effectively  estop  any  stockholder  from  opposing  a 
voting  trust,  unless  indeed  the  trust  agreement  were 
voidable  on  specific  grounds  other  than  the  mere  crea- 
tion of  such  a  trust.  The  detail  is  not  without  signif- 
icance, as  in  White  v.  Thomas  Inflatable  Tire  Co.  (52 
N.  J.  Eq.  178;  1893),  the  absence  from  the  certificate  of 
incorporation  and  by-laws  of  any  reference  to  the  pre- 
liminary agreement  for  a  trust  was  apparently  a  reason 
for  holding  that  the  terms  of  the  trust  were  not  binding 
on  those  who  had  later  without  notice  of  it  purchased 
shares  of  stock.  Likewise,  in  the  case  of  corporations 
created  by  special  legislative  acts  any  discussion  of 
legality  may  well  be  limited  if  not  altogether  avoided. 
Thus  in  the  instance  of  the  Southern  Railway  the  Act  of 
the  Virginia  legislature  (February  20,  1894)  authorizing 
the  organization  of  a  corporation  by  the  purchasers  of 
the  mortgaged  property  of  the  Richmond  and  Danville 
Railroad  Company,  provided  that  the  stock  of  the  new 
corporation  should  have  "such  preferences,  conditions 
and  voting  power  as  shall  be  provided  in  said  plan  of 
organization.  ..."  A  subsequent  Act  of  the  legisla- 
ture (January  23,  1900)  specifically  recognized  the 
existence   of   the   voting   trust,    mentioned    the   voting 


VOTING  TRUSTS  129 

trustees  by  name,  and  authorized  certain  action  by 
them  in  connection  with  a  reduction  of  the  company's 
common  stock. 

The  court,  when  discussing  the  pubHc  pohcy  of 
Virginia  in  the  case  of  Carnegie  Trust  Co.  v.  Security 
Life  Ins.  Co.  (Ill  Va.  1;  1910),  although  it  upheld  the 
trust  then  under  discussion,  apparently  was  unaware  of 
the  action  taken  by  the  Virginia  legislature  on  this 
subject  in  connection  with  the  formation  of  the  Southern 
Railway. 

If  a  voting  trust  should  be  so  formed  as  not  to  include 
the  entire  issue  of  stock,  the  inference  is  of  course  per- 
missible that  the  trustees  will  act  only  for  their  bene- 
ficiaries and  that  they  may,  consequently,  act  not  in  the 
interest  of  other  stockholders  and  so  not  for  the  common 
interest  of  all.  Thus  a  trust  presumably  for  the  benefit 
of  all  the  stockholders,  but  from  which  certain  stock- 
holders are  excluded,  may  be  subject  to  criticism.  The 
trust  agreement  should  not  be  in  such  terms  as  to  be  for 
the  benefit  of  certain  stockholders  to  the  exclusion  of 
others  (Kreissl  v.  Distilling  Co.,  61  N.  J.  Eq.  5;  1900). 
Such  an  objection,  that  a  voting  trust  of  less  than  the 
entire  outstanding  stock  may  produce  results  prejudicial 
to  the  holders  of  the  minority  interest,  has  been  met, 
voluntarily  or  otherwise,  in  the  later  voting  trust  agree- 
ments by  the  specific  provision  that  any  stockholder 
might  subject  his  shares  to  the  trust.  But  it  may  be  ob- 
served that  fair  criticism  cannot  be  directed  to  the  mere 
existence  of  a  voting  trust,  so  much  as  to  the  improper 
use  of  powers  conferred  by  it.    Often,  also,  as  already  sug- 


130  THE  LAW  OF 

gested,  the  minority  holders  not  participating  in  a  voting 
trust  are  in  no  worse  position  than  are  minorities  in  cor- 
porations all  of  whose  stock  is  held  directly  by  the  stock- 
holders. 

The  early  opposition  to  voting  trusts  on  the  part  both 
of  coiu'ts  and  of  writers  has  in  fact  gradually  been 
modified.  In  attacking  trusts  resort  has  been  had  to 
details  which  were  not  typical  and  which  were  obviously 
open  to  criticism,  while  the  frequent  creation  of  such 
trusts  even  at  the  present  time  indicates  at  least  the 
rather  prevalent  belief  of  the  bar  in  their  propriety  and 
also  the  widespread  confidence  of  business  men  in  their 
efficacy.  The  changed  point  of  view  was  reflected  by 
the  court  in  Carnegie  Trust  Co.  v.  Security  Life  Ins.  Co. 
(Ill  Va.  1;  1910),  as  follows:  ''In  considering  the  cases, 
however,  and  the  text  writers  who  have  commented 
upon  them,  it  is  impossible  not  to  be  impressed  with  the 
change  of  opinion  which  has  taken  place  with  respect  to 
the  true  nature  of  such  contracts.  In  the  early  stages  of 
the  development  of  this  idea  there  was  a  strong  senti- 
ment against  them  which  found  expression  in  the 
opinions  of  judges  and  in  the  not  always  temperate 
language  of  distinguished  commentators  upon  the  law; 
but  experience  has  demonstrated  their  usefulness,  and 
the  hostility  evinced  toward  them  has  by  degrees 
diminished." 

Decisions  adverse  to  voting  trusts  have  frequently, 
and  naturally,  been  cited  as  authorities  for  broader 
propositions  than  they  really  represent.  Thus,  White  v. 
Thomas  InflatabU   Tire  Co.   (52  N.  J.  Eq.   178;   1893) 


VOTING  TRUSTS  131 

represented  a  quite  abnormal  form  of  voting  trust.  Of 
the  authorized  capital  of  100,000  shares,  83,000  shares 
were  issued  and  were,  except  qualifying  shares,  sub- 
jected to  the  trust  agreement.  The  arrangement  was 
that  Thomas,  who  had  turned  in  55,000  shares,  should 
have  the  right  to  nominate  one  less  than  a  majority  of 
the  board,  while  the  other  parties,  who  turned  in  28,000 
shares,  should  have  the  right  to  nominate  a  majority  of 
the  board.  Subsequently,  the  plaintiff  Bidwell  bought 
from  Thomas  trust  certificates  representing  53,000 
shares,  and  yet  did  not  secure  the  control  of  the  board 
under  the  agreement,  although  the  material  terms  of  the 
agreement  did  not  appear  either  in  the  certificate  of 
incorporation  or  by-laws  or  stock  certificates  of  the  com- 
pany or  in  the  form  of  the  trust  certificates.  Thomas 
claimed  that  he  still  retained  the  right  to  nominate  a 
minority  of  the  board,  but  this  claim  was  not  upheld,  as 
it  was  assumed  that  the  trust  certificates  were  negotiable 
and  that  the  plaintiff  had  succeeded  to  the  rights  of 
Thomas;  and  accordingly  the  trustees  were  enjoined 
from  voting  as  directed  by  Thomas.  Furthermore,  the 
company  had  sold  the  17,000  shares  in  the  treasury  to 
the  plaintiffs,  Bidwell  taking  16,995  of  these  shares,  and 
(the  directors  at  this  time  being  apparently  the  same  as 
those  who  had  joined  in  the  trust  agreement)  it  was 
held  that  the  issue  of  this  stock  effected  an  abandon- 
ment, by  those  participating  in  the  issue,  of  any  rights 
under  the  trust  agreement;  and  also,  this  stock  having 
been  purchased  without  notice  of  the  trust,  that  the 
purchasers  were  entitled  to  assume  that  all  the  stock 


132  THE  LAW  OF 

stood  on  the  same  basis  and  that  a  majority  of  the  stock 
was  entitled  to  elect  the  board  of  directors.  Had  those 
affected  been  simply  the  original  parties  to  the  agree- 
ment the  court  saw  "no  difficulty  in  holding  such  con- 
tract valid  and  its  enforcement  proper  and  practicable. 
I  see  nothing  in  it  contrary  to  public  policy."  But  as 
soon  as  the  rights  of  third  parties,  not  affected  with 
notice  of  the  extraordinary  agreement,  intervened 
(c/.  Gray  v.  Bloomington  &  Normal  Ry.  Co.,  120  111. 
App.  159;  1905),  the  legal  situation  was  materially 
altered,  and  the  court  naturally  did  not,  and  probably 
could  not,  look  with  favor  on  an  agreement  which  was 
directed  to  conferring  on  certain  stockholders,  and  per- 
haps secretly,  rights  which  were  to  be  improperly  with- 
held from  other  stockholders. 

So,  cases  upholding  voting  trusts  have  been  cited 
rather  too  broadly  than  the  facts  have  been  warranted. 
Thus,  in  the  case  of  Chapman  v.  Bates  (60  N.  J.  Eq.  17; 
1900)  the  collective  proxies  and  powers  of  attorney  were 
not  really  upheld  because  the  instruments  constituted  a 
valid  voting  trust  but  on  the  theory  that  as  the  defend- 
ants had  advanced  funds  for  the  benefit  of  the  company 
and  otherwise  changed  their  position  in  reliance  on  the 
powers  of  attorney,  it  would  have  been  inequitable  to 
set  aside  the  proxies  without  restoring  the  defendants 
to  their  original  position.  It  is  also  to  be  noted  that  the 
proxies  were  all  to  expire  January  1,  1902,  and  that  the 
plaintiff's  proxy  was  signed  July  6,  1899,  and  thus  was 
within  the  statute  permitting  proxies  for  a  period  of 
three  years.     The  proxy  was  also   obviously   ''in   the 


VOTING  TRUSTS  133 

nature  of  a  power  coupled  with  an  interest,"  as  in 
Smith  V.  S.  F.  &  N.  P.  Ry.  Co.  (115  Cal.  584;  1897)  and 
so  not  subject  to  revocation  at  will. 

Allusion  may  be  made  to  a  few  decisions  on  collateral 
points,  as  the  discretionary  power  of  voting  trustees 
(Haines  v.  Kinderhook  &  Hudson  Ry.  Co.,  33  App.  Div., 
N.  Y.,  154;  1898);  the  liability  of  trust  certificates  to  a 
transfer  tax  (United  States  Radiator  Co.  v.  State,  151 
App.  Div.,  N.  Y.,  367;  1912;  Bonbright  v.  State,  New 
York  Board  of  Claims,  July  2,  1914;  Opinion  of  Attor- 
ney General  of  New  York,  re  Hudson  &  Manhattan 
R.  R.  Co.,  March  4,  1913);  the  liability  of  trust  cer- 
tificates to  tax  as  evidence  of  indebtedness  (Common- 
wealth v.  Union  Traction  Co.,  192  Pa.  507;  1899);  the 
analogy,  with  respect  to  the  rights  of  pledgees,  of  trust 
certificates  to  stock  certificates  (Union  Trust  Co.  of 
Rochester  v.  Oberg,  108  N.  E.  809;  N.  Y.,  1915);  and 
the  impropriety  of  asking  the  bankruptcy  court  to 
compel  dissenting  creditors  of  a  bankrupt  corporation  to 
accept  voting  trust  certificates  in  a  new  corporation  (In 
re  Northampton  Portland  Cement  Co.,  185  Fed.  542;  1911). 

The  cases  referred  to  will  serve  as  a  guide  to  the 
literature  of  the  subject,  and  further  comment  upon 
them  is  unnecessary  for  the  present  purpose,  which  is 
chiefly  a  statement  of  the  principal  questions  raised  by 
controversies  over  voting  trusts.  To  this  end  a  minute 
discussion  of  the  various  details  involved  in  the  tech- 
nical arguments  is  not  necessary  and,  except  for  those 
actually  engaged  in  litigation  on  the  subject,  may  not  be 
desirable. 


134  THE  LAW  OF 

Details  of  procedure  in  litigation  also  need  not  be 
particularly  considered,  although  it  may  be  noted  that 
trust  agreements  have  been  attacked  both  by  holders  of 
trust  certificates  and  by  holders  of  stock  certificates;  by 
the  former  usually  on  the  theory  that  for  some  reason 
their  contract  is  revocable  or  voidable,  and  by  the  latter 
on  the  theory  that  the  trust  agreement  effects  an  illegal 
impairment  of  the  rights  of  non-assenting  stockholders. 
Or  the  plaintiff,  as  it  has  happened,  may  be  the  holder 
both  of  stock  certificates  and  of  trust  certificates. 

The  documents  printed  in  the  following  pages  will 
serve  to  illustrate  portions  of  the  foregoing  discussion, 
and  will  also  suggest  certain  details  on  which  extended 
comment  is  unnecessary.  They  are  not,  however,  at- 
tached as  examples  to  be  followed  under  other  condi- 
tions, for  the  reason  that  few  instruments  of  such  special 
character  can  be  safely  or  appropriately  adopted  in  cir- 
cumstances apparently  similar  but  inherently  different. 


VOTING  TRUSTS  135 

IV 
FORMS  RELATING  TO  VOTING  TRUSTS 

Voting  Trust  Agreements:  page 

Anthony  &  Scovill  Co 136 

Chicago  Great  Western  Railroad  Co 138 

Equitable  Life  Assurance  Society 148 

General  Motors  Co 151 

Voting  Trust  Certificates: 

Baltimore  &  Ohio  Railroad  Co 160 

California  Petroleum  Corporation 161 

Cincinnati,  Hamilton  &  Dayton  Railroad  Co 163 

International  Harvester  Co 163 

Mobile  &  Ohio  Railroad  Co 165 

New  Orleans  Terminal  Co 165 

Pittsburg  &  Lake  Erie  Railroad  Co 167 

Pope  Manufacturing  Co 167 

Standard  Oil  Co 169 

Extension  Agreements: 

Interborough-Mctropolitan  Co 170 

Southern  Railway  Co 179 

Documents  Incident  to  Extension: 

Interborough-Mctropolitan  Co 181 

International  Mercantile  Marine  Co 183 

•  Southern  Railway  Co 184 

Termination: 

(a)  by  limitation: 

Chesapeake  &  Ohio  Railway  Co 190 


136  FORMS  RELATING  TO 

PAGE 

Chicago  Great  Western  Railroad  Co 191 

International  Harvester  Co 192 

Kansas  City  Southern  Railway  Co 193 

Metropolitan  West  Side  Elevated  Railway  Co 194 

Toledo,  St.  Louis  &  Western  Railroad  Co 195 

(b)  by  occurrence  of  specified  event: 

Erie  Railroad  Co 196 

Reading  Co 198 

St.  Louis  &  San  Francisco  Railroad  Co 201 

(c)  by  discretionary  action  of  trustees: 

Baltimore  &  Ohio  Railroad  Co 203 

Bankers  Trust  Co 204 

Colorado  &  Southern  Railway  Co 206 

International  Mercantile  Marine  Co 207 

National  Railroad  Co.  of  Mexico 209 

Northern  Colorado  Power  Co 209 

Northern  Pacific  Railway  Co 211 

(d)  miscellaneous: 

Colorado  Midland  Railway  Co 213 

Long  Island  Railroad  Co 214 

St.  Louis,  Iron  Mountain  &  Southern  Railway  Co 214 


THE  ANTHONY  AND  SCOVILL  COMPANY 

Agreement,  made  the  29th  day  of  November,  1904,  between  the 
stockholders  of  The  Anthony  &  Scovill  Company,  a  corporation 
organized  under  the  laws  of  New  York,  who  shall  become  parties  to 
this  agreement  by  signing  the  same,  hereinafter  called  the  stock- 
holders, of  the  first  part,  and  Ruel  W.  Poor  and  Walter  H.  Bennett, 
hereinafter  called  the  trustees,  parties  of  the  second  part: 

Whereas  the  parties  of  the  first  part  deem  it  to  their  interest  to 
act  together  concerning  the  management  of  the  Anthony  &  Scovill 
Company,  of  which  they  are  respectively  stockholders,  and  to  that 


VOTING  TRUSTS  137 

end  unite  the  voting  power  held  by  them  as  such  stockholders, 
and  to  place  the  same  in  the  hands  of  the  trustees,  with  full  power 
and  discretion  to  sell  said  stock  for  the  benefit  of  said  company  or 
of  its  creditors,  as  hereinafter  provided. 

Now,  Therefore,  This  Agreement,  made  in  consideration  of  the 
premises  and  of  the  mutual  covenants  herein  contained  and  of  $1.00 
by  each  of  the  parties  to  the  other  in  hand  paid,  witnesseth: 

First. — Each  party  hereto  of  the  first  part  holding  shares  of  the 
capital  stock  of  said  Anthony  &  Scovill  Company  to  the  number  set 
opposite  his  name  hereto  subscribed  respectively,  hereby  severally 
agrees  to  deposit  the  same  and  the  certificates  therefor,  with  suffi- 
cient transfers  thereof,  with  said  trustees,  which  deposit  shall  con- 
tinue for  the  period  of  five  years  from  the  date  hereof,  or  for  such 
shorter  period  as  said  trustees  shall  determine,  as  hereinafter  pro- 
vided. Upon  making  such  deposit  all  shares  represented  by  the 
stock  certificates,  so  deposited,  shall  be  transferred  upon  the  books 
of  the  said  company  to  the  names  of  said  trustees,  or  to  the  name  of 
any  appointee  or  appointees  of  said  trustees,  and  the  said  trustees 
are  hereby  fully  authorized  and  empowered  to  cause  such  transfers 
to  be  made,  and  also  to  cause  any  further  transfers  of  such  shares 
to  be  made  which  may  become  necessary  through  any  change  of 
the  persons  holding  the  office  of  trustee,  or  by  reason  of  any  sale  of 
said  stock  or  any  part  thereof  as  hereinafter  provided.  Until  the 
expiration  of  said  period  of  five  years,  the  trustees  shall  possess  and 
be  entitled  to  exercise  all  rights  of  every  name  and  nature,  including 
the  right  to  vote,  in  respect  to  any  and  all  such  shares  deposited; 
and  also  to  receive  dividends,  if  any,  upon  said  stock. 

Second. — From  time  to  time  after  this  agreement  shall  have  taken  ef- 
fect, the  trustees  may  receive  dei)osits  of  any  additional  shares  of  the 
capital  stock  of  the  said  company,  upon  the  terms  and  conditions  hereof. 

Third. — Each  party  hereto  of  the  first  part  hereby  severally  agrees 
that  the  shares  or  any  part  thereof  so  deposited  by  him  may  be  sold 


138  FORMS  RELATING  TO 

and  transferred  at  any  time  in  the  discretion  of  the  trustees  at  such 
price  below  the  par  value  or  otherwise,  as  they  may  determine, 
and  either  for  cash  or  other  valuable  consideration,  when,  in  their 
judgment,  the  interest  of  said  company  or  its  creditors  will  be  pro- 
moted. The  said  trustees  and  their  survivor  and  successors  or  suc- 
cessor, are  hereby  expressly  authorized  and  empowered  to  apply 
the  proceeds  of  sale  of  said  stock  or  any  part  thereof,  after  deduct- 
ing all  their  expenses,  to  the  payment  of  the  debts  and  obhgations 
of  the  same  company,  or  such  of  them  as  they  deem  proper,  or  to 
the  purchase  of  any  claims  against  said  company.  And  after  de- 
ducting any  indebtedness  to  said  company  of  the  parties  depositing 
said  stock  from  his  share  of  proceeds,  if  any,  the  balance,  if  any, 
shall  be  divided  among  the  stockholders  who  have  become  parties 
hereto,  in  accordance  with  their  respective  interests. 

Fourth. — In  voting  the  stock  and  in  negotiating  any  sale  of  said 
stock  so  held  by  them  the  trustees  will  exercise  their  best  judgment 
from  time  to  time,  but  it  is  expressly  understood  and  agreed  that 
neither  of  the  trustees  incurs  any  personal  liability  for  any  error  of 
law  or  judgment  or  for  any  matter  or  thing  done  or  omitted  under 
this  agreement. 

Fifth. — This  agreement  may  be  executed  in  several  counterparts 
each  of  which  so  executed  shall  be  deemed  an  original,  and  shall 
together  constitute  but  one  and  the  same  instrument. 

In  Witness  Whereof  the  several  parties  hereto  have  hereunto  set 
their  hands  and  seals  the  day  and  year  first  above  written. 

CHICAGO  GREAT  WESTERN  RAILROAD  COMPANY 

This  Agreement,  made  this  first  day  of  September,  one  thousand 
nine  hundred  and  nine,  by  and  between  J.  P.  Morgan  &  Co.  (here- 
inafter called  "Reorganization  Managers"),  as  Reorganization  Man- 
agers under  a  certain  Plan  and  Agreement  for  the  reorganization  of 
the  Chicago  Great  Western  Railway  Company,  dated  June  1,  1909, 


VOTING  TRUSTS  139 

parties  of  the  first  part,  and  J.  Pierpont  Morgan,  George  F.  Baker, 
and  Robert  Fleming  (hereinafter  called  "Voting  Trustees")  parties 
of  the  second  part; 

WITNESSETH : 

Whereas,  Chicago  Great  Western  Railroad  Company  (hereinafter 
called  the  "Company"),  being  the  "new  company"  referred  to  in, 
and  contemplated  to  be  organized  pursuant  to,  the  above  mentioned 
Plan  and  Agreement  for  the  reorganization  of  the  Chicago  Great 
Western  Rsalway  Company,  is  a  corporation  organized  under  the 
laws  of  the  State  of  Illinois,  having  an  authorized  capital  stock  of 
$96,000,000,  of  which  $50,000,000  (consisting  of  500,000  shares  each 
of  the  par  value  of  $100)  shall  be  preferred  stock,  and  $46,000,000 
(consisting  of  460,000  shares  each  of  the  par  value  of  $100)  shall  be 
common  stock,  and  has  made  and  executed,  or  is  about  to  make 
and  execute,  a  First  Mortgage,  dated  September  1,  1909,  to  the 
Standard  Trust  Company  of  New  York  as  Trustee,  upon  its  property 
to  secure  an  issue  of  First  Mortgage  Fifty- Year  Four  Per  Cent.  Gold 
Bonds,  for  an  aggregate  principal  sum  not  exceeding  $75,000,000;  and 

Whereas,  Pursuant  to  a  certain  contract  dated  August  20,  1909, 
between  the  Company  as  party  of  the  first  part,  and  F.  W.  Stevens 
and  George  H.  Gardiner  as  joint  tenants,  parties  of  the  second  part, 
and  the  Reorganization  Managers  as  parties  of  the  third  part,  and 
for  the  consideration  therein  stated,  the  Company  is  obliged  to  issue 
to  the  nominees  of  the  Reorganization  Managers  fully  paid  non- 
assessable shares  of  its  capital  stock  in  amounts  specified  in  said 
contract,  and  in  furtherance  of  said  Plan  of  Reorganization  the  Re- 
organization Managers  have  directed  that  the  said  shares  of  stock 
be  issued  to  the  Voting  Trustees;  and 

Whereas,  Upon  the  terms  of  this  agreement,  the  Voting  Trustees 
have  received,  or  are  to  receive,  certificates  of  such  shares,  each  of 
the  par  value  of  $100,  of  the  capital  stock  of  the  Company  as  fol- 
lows, viz: 

shares  of  Preferred  Stock, 

shares  of  Common  Stock, 


140  FORMS  RELATING  TO 

which  certificates,  together  with  such  other  certificates  of  stock  in 
the  Company  as  from  time  to  time  hereafter  may  be  deUvered  to  the 
Voting  Trustees  hereunder,  are  to  be  held  and  disposed  of  by  the 
Voting  Trustees  under  and  pursuant  to  the  terms  of  this  agreement; 
all  of  which  certificates  of  stock  are  hereinafter  generally  designated 
"stock  certificates"; 

Now,  Therefoee,  it  is  Agreed  as  Follows: 

First. — The  Voting  Trustees,  from   time  to  time,  upon  request, 
will  cause  to  be  issued  in  respect  of  stock  certificates  of  the  Company 
delivered  to  them  as  aforesaid,  certificates  in  substantially  the  fol- 
lowing form  (hereinafter  called  "stock  trust  certificates"): 
No.  Shares. 

Chicago  Great  Western  Railroad  Company 

^  \   Stock  Trust  Certificate 

Common  J 

This  Certifies,  that,  as  hereinafter  provided,  and  on  surrender 
hereof,  will   be  entitled,   out  of  certificates 

defivered  to  the  undersigned  Voting  Trustees  under  the  Agreement 
hereinafter   mentioned,    to   receive   a   certificate   or   certificates   for 

shares  each  of  one  hundred  dollars,  of  the 
capital  stock  of  the  Chicago  Great  Western  Railroad  Company;  and, 
in  the  meantime,  to  receive  payments  equal  to  the  dividends,  if  any, 
collected  by  the  Voting  Trustees  upon  a  like  number  of  such  shares 
of  stock  received  and  held  by  the  Voting  Trustees  under  said  agree- 
ment. No  voting  right  passes  by  or  under  this  certificate,  or  by  or 
under  any  agreement  expressed  or  implied,  it  being  expressly  stipu- 
lated that  until  the  actual  transfer  of  such  stock  certificates  to  the 
registered  owners  hereof,  the  Voting  Trustees  shall  possess  and  shall 
be  entitled  in  their  discretion  to  exercise,  in  respect  of  any  and  all  of 
such  stock,  the  right  to  vote  thereon  for  every  purpose,  and  to  con- 
sent to  any  corporate  act  of  said  Company  as  provided  in  said 
agreement;  but  the  Voting  Trustees  will  not  vote  said  stock  to  au- 
thorize the  creation  of  any  mortgage  upon  the  property  acquired 


VOTING  TRUSTS  141 

under  the  plan  of  reorganization  mentioned  in  said  Agreement,  to 
secure  any  bonds  or  indebtedness  other  than  the  First  Mortgage 
Fifty- Year  Four  Per  Cent.  Gold  Bonds  of  the  Company,  described 
in  said  Agreement,  and  will  not  vote  to  authorize  any  increase  of  its 
preferred  capital  stock,  except  in  each  instance  with  the  consent  of 
the  registered  holders  of  stock  trust  certificates  in  respect  of  a 
majority  in  amount  of  the  preferred  stock  of  the  Company  at  the 
time  outstanding. 

This  certificate  is  issued  pursuant  and  subject  to  an  Agreement 
lodged  with  the  Voting  Trustees,  dated  September  1,  1909,  and  exe- 
cuted between  J.  P.  Morgan  &  Co.,  as  Reorganization  Managers, 
and  the  undersigned  Voting  Trustees,  defining  the  rights  of  the  holder 
hereof,  and  the  duties  and  liabilities  of  the  Voting  Trustees.  No 
stock  certificate  shall  be  deliverable  hereunder  before  September  1, 
1914,  unless  as  hereinafter  stated  said  Agreement  shall  have  been 
sooner  terminated,  in  which  event  such  stock  certificates  shall  be 
deliverable  as  soon  as  practicable  after  such  termination.  At  any 
time,  the  said  Agreement,  in  the  manner  provided  herein,  may  be 
terminated  by  a  majority  of  the  Voting  Trustees  in  their  discretion, 
and  shall  be  terminated  upon  the  written  request  of  registered  holders 
of  stock  certificates  in  respect  of  a  majority  of  all  the  preferred  stock 
then  held  by  the  Voting  Trustees  and  in  respect  of  common  stock 
to  an  amount  sufficient  with  such  majority  of  such  preferred  stock 
to  constitute  a  majority  of  all  the  stock  (preferred  and  common) 
then  held  by  the  Voting  Trustees. 

This  certificate  is  transferable  only  on  the  books  of  the  Voting 
Trustees  or  their  agents,  on  surrender  thereof,  by  the  registered 
holder  in  person  or  by  attorney  duly  authorized,  in  accordance  with 
rules  established  by  the  Voting  Trustees,  and,  until  so  transferred, 
the  Voting  Trustees  may  treat  the  registered  holder  as  the  owner 
of  this  certificate  for  all  purposes  whatsoever. 

This  certificate  is  not  valid  unless  duly  signed  on  behalf  of  the 
Voting  Trustees  by  their  agents,  and  also  registered  by 
,  as  Registrar. 


142  FORMS  RELATING  TO 

In  Witness  Whereof,  the  Voting  Trustees  have  caused  this  certifi- 
cate to  be  signed  by  their  duly  authorized  agents,  , 
this                  day  of                 ,  19 

Voting  Trustees. 
by  their  agents  hereunder, 
Registered: 

Registrar, 

by 

Any  and  all  such  stock  trust  certificates  deliverable  in  respect  of 
stock  certificates  received  by  the  Voting  Trustees  pursuant  to  the 
aforesaid  tripartite  contract  of  August  20,  1909,  or  otherwise  caused 
to  be  delivered  to  them  by  the  Reorganization  Managers,  shall  be 
issued  in  the  name  of  such  person  or  persons  as  from  time  to  time 
may  be  designated  by  the  Reorganization  Managers. 

The  said  stock  trust  certificates  shall  be  transferable  only  on  the 
books  of  the  Voting  Trustees,  to  be  kept  by  them  or  their  agents, 
on  surrender  thereof,  by  the  registered  holder  in  person  or  by  at- 
torney duly  authorized,  and  in  accordance  with  rules  from  time  to 
time  established  for  that  purpose  by  the  Voting  Trustees,  and,  until 
so  transferred,  the  Voting  Trustees  may  treat  the  registered  holders 
as  the  owners  of  said  stock  trust  certificates  for  all  purposes  what- 
soever. The  transfer  books  may  be  closed  by  the  Voting  Trustees 
at  any  time  prior  to  the  holding  of  meetings,  or  the  payment  of 
dividends,  or  for  any  other  purpose. 

Second. — This  agreement  shall  terminate  in  any  event  on  Septem- 
ber 1,  1914,  without  notice  by  or  action  of  the  Voting  Trustees;  and 
it  shall  terminate  prior  to  such  date  forthwith  upon  delivery  to  the 
Agent  of  the  Voting  Trustees  subscribing  the  stock  trust  certificates, 
of  a  written  request  of  such  termination,  executed  and  proved  in 
the  maimer  set  forth  in  Article  Eighth  hereof,  by  registered  holders 
of  stock  trust  certificates  in  respect  of  a  majority  of  all  the  pre- 
ferred stock  then  held  by  the  Voting  Trustees  and  in  respect  of  com- 
mon stock  to  an  amount  sufficient  with  such  majority  of  such  pre- 


VOTING  TRUSTS  143 

ferred  stock  to  constitute  a  majority  of  all  the  stock  (preferred  and 
common)  then  held  by  such  Voting  Trustees,  all  stock  trust  certif- 
icates held  by  or  for  the  benefit  of  the  Company  being  excluded 
from  the  computation.  At  any  time,  with  the  concurrence  of  the 
Reorganization  Managers,  this  agreement  may  be  terminated  by  a 
majority  of  the  Voting  Trustees,  in  their  discretion,  after  at  least 
sixty  days'  notice  of  intention  to  terminate  the  same  shall  have  been 
given,  according  to  the  provisions  of  Article  Ninth  hereof.  On 
September  1,  1914,  or  upon  the  earlier  termination  of  this  agreement 
as  above  specified,  the  Voting  Trustees,  in  exchange  for,  or  upon 
surrender  of,  any  stock  trust,  certificate  then  outstanding,  shall,  in 
accordance  with  the  terms  thereof,  and  out  of  the  stock  certificates 
so  received  and  held  by  them,  deliver  stock  certificates  to  the  holders 
of  stock  trust  certificates,  and  thereupon  all  liability  of  the  Voting 
Trustees  for  delivery  of  said  stock  certificates  shall  terminate;  and 
the  Voting  Trustees  may  require  the  holders  of  stock  trust  certif- 
icates to  exchange  their  certificates  for  stock  certificates  accordingly. 
In  case  upon  or  after  the  termination  of  this  agreement  the  Voting 
Trustees  shall  deposit  with  an  incorporated  bank  or  trust  company 
in  good  standing  having  an  office  in  the  city  of  New  York,  stock 
certificates  so  held  by  them,  properly  endorsed  for  transfer  in  blank, 
representing  the  number  of  shares  of  the  class  of  stock  of  the  Com- 
pany called  for  by  the  stock  trust  certificates  outstanding,  with  au- 
thority in  writing  to  such  bank  or  trust  company  to  deliver  the  said 
stock  certificates  in  exchange  for  stock  trust  certificates  when  and  as 
surrendered  for  exchange  as  herein  provided,  then  all  further  liabil- 
ity of  the  Voting  Trustees,  or  of  any  of  them,  for  the  delivery  of 
stock  certificates  in  exchange  for  stock  trust  certificates  shall  cease 
and  determine. 

Third. — From  time  to  time  hereafter,  the  Voting  Trustees  may 
receive  any  additional  stock  certificates  of  the  Company,  and,  in 
respect  of  all  such  stock  certificates  so  received,  will  issue  and  deliver 
stock  trust  certificates  in  form  corresponding  to  those  above  speci- 
fied, and  entitling  the  holders  to  the  rights  therein  and  herein  provided. 


144  FORMS  RELATING  TO 

All  stock  trust  certificates  to  be  issued  under  this  agreement  shall 
indicate  upon  the  face  thereof,  whether  they  are  issued  in  respect  of 
preferred  stock  certificates  or  of  common  stock  certificates,  and  the 
holders  of  stock  trust  certificates  in  respect  of  one  class  of  stock  cer- 
tificates shall  have  no  interest  in,  or  claim  upon,  stock  or  stock  cer- 
tificates of  the  other  class,  nor  upon  any  stock  or  stock  certificates 
except  of  the  class  and  to  the  amount  stated  in  such  stock  trust 
certificates  respectively. 

In  case  the  Voting  Trustees  shall  receive  any  stock  certificates  of 
the  Company  issued  by  way  of  dividend  upon  stock  certificates  held 
by  them  under  this  agreement,  the  said  Voting  Trustees  shall  hold  such 
certificates  likewise  subject  to  the  terms  of  this  agreement,  and  shall 
issue  stock  trust  certificates  representing  such  stock  certificates  to 
the  respective  registered  holders  of  the  then  outstanding  stock  trust 
certificates  entitled  to  such  dividend. 

Fourth. — Any  Voting  Trustee  may  at  any  time  resign  by  deliver- 
ing to  the  other  Voting  Trustees  in  writing  his  resignation  to  take 
effect  ten  days  thereafter.  In  case  of  the  death  or  resignation  or  the 
inability  to  act  of  any  Voting  Trustee,  the  vacancy  occurring  in  his 
office  shall  be  filled  by  the  appointment  of  a  successor  or  successors 
to  be  named  by  the  Reorganization  Managers.  The  term  Voting 
Trustees,  as  used  in  this  agreement  and  in  said  stock  trust  certifi- 
cates, shall  apply  to  the  parties  of  the  second  part  and  their  suc- 
cessors at  any  time  hereunder.  Each  Voting  Trustee  shall  be  en- 
titled to  compensation  from  the  Company  at  the  rate  of  $1,000  per 
annum,  beginning  from  September  1,  1909. 

Fijth. — The  Voting  Trustees  may  adopt  their  o\Yn  rules  of  proce- 
dure. The  action  of  a  majority  of  the  Voting  Trustees  expressed 
from  time  to  time  at  a  meeting,  or  by  writing  with  or  without  a 
meeting,  shall,  except  as  otherwise  herein  provided,  constitute  the 
action  of  the  Voting  Trustees  and  have  the  same  effect  as  though 
assented  to  by  all.  Any  Voting  Trustee  may  vote  or  may  act  in 
person  or  by  proxy,  and  may  be  a  director  or  an  officer  of  the  Com- 


VOTING  TRUSTS  145 

pany,  and  may  vote  for  himself  as  such.  The  Voting  Trustees  may 
exercise  any  power  or  perform  any  act  hereunder  by  an  agent  or  at- 
torney appointed  in  writing. 

Sixth. — The  Voting  Trustees  shall  have  full  power  from  time  to 
time  and  at  any  time  to  cause  the  stock  certificates  to  be  transferred 
into  their  own  names  or  into  the  names  of  their  nominees;  but  as 
holders  of  said  stock  they  assume  no  liability  as  stockholders,  their 
interest  hereunder  being  that  of  trustees  merely.  In  voting  the 
stock  represented  by  the  stock  certificates,  the  Voting  Trustees  will 
exercise  their  best  judgment  from  time  to  time  to  secure  the  election 
of  suitable  directors  of  the  Company,  to  the  end  that  its  business 
and  affairs  shall  be  properly  managed,  and  in  voting  and  in  acting 
on  other  matters  the  Voting  Trustees  will  likewise  exercise  their 
best  judgment;  but  they  assume  no  responsibility  in  respect  of  such 
management  or  in  respect  of  any  action  taken  by  them  or  taken  in 
pursuance  of  their  consent  thereto,  or  in  pursuance  of  their  vote  so 
cast,  and  no  Voting  Trustee  shall  incur  any  responsibility,  as  stock- 
holder, trustee,  or  otherwise,  by  reason  of  any  error  of  law,  or  of  any 
matter  or  thing  done  or  suffered  or  omitted  to  be  done  under  this 
agreement,  except  for  his  own  individual  wilful  malfeasance. 

During  the  continuance  of  the  voting  trust  the  Directors  of  the 
Company,  if  and  when  pennitted  by  law,  shall  be  elected  annually, 
each  for  the  tcnn  of  one  year;  but  if  for  an\^  reason  it  shall  not  be 
practicable  to  elect  the  directors  annuallj^  eacli  for  the  term  of  one 
year,  the  Voting  Trustees,  with  the  concurrence  of  the  Reorganiza- 
tion Managers,  shall  take  such  steps  as  in  their  judgment  may  be 
practicable  and  best  adapted  to  enable  the  stockholders  of  the  Com- 
pany to  elect  the  entire  Board  of  Directors  of  the  Company  at  the 
annual  stockholders'  meeting  to  be  held  next  after  the  tenniuation  of 
voting  trust,  or  as  soon  as  may  be  practicable  after  the  termination 
of  the  voting  trust. 

The  Voting  Trustees,  and  their  successors,  as  trustees  hereunder, 
at  any  and  at  all  times  shall  be  entitled  to  receive,  and  from  any 


146  FORMS  RELATING  TO 

and  all  moneys  and  stock  by  them  received  and  held  hereimder  or 
in  connection  herewith  may  retain,  indemnity  for  and  against  any 
and  all  claims  and  any  and  all  expenses  and  liabilities  by  them  in- 
curred in  connection  with  or  growing  out  of  this  agreement  or  their 
bona  fide  discharge  of  their  duties  hereunder. 

Seventh. — Until  the  actual  transfer  of  stock  certificates  in  ex- 
change for  stock  certificates  hereunder,  the  Voting  Trustees  possess 
and  shall  be  entitled  in  their  discretion  to  exercise,  in  person  or  by 
their  nominees,  in  respect  of  any  and  all  said  stock,  the  right  to  vote 
thereon  for  every  purpose  and  to  consent  to  any  corporate  act  of 
said  Company,  as  though  absolute  owners  of  said  stock,  it  being  ex- 
pressly stipulated  that  no  voting  right  passes  to  others  by  or  under 
said  stock  trust  certificates,  or  by  or  under  this  agreement,  or  by 
or  under  any  agreement,  expressed  or  implied;  but  the  Voting 
Trustees,  however,  during  the  continuance  of  this  agreement,  shall 
not  vote  said  stock  to  authorize  or  consent  to  any  mortgage  upon 
the  property  of  the  Company  acquired  under  the  aforesaid  plan  of 
reorganization  of  the  Chicago  Great  Western  Railway  Company,  to 
secure  any  bonds  or  indebtedness  other  than  the  First  Mortgage 
Fifty-Year  Four  Per  Cent.  Gold  Bonds  of  the  Company  described 
in  the  preamble  to  this  agreement,  and  shall  not  vote  to  authorize 
any  increase  in  the  amount  of  the  authorized  preferred  capital  stock 
of  the  Company,  except  in  each  instance  with  the  consent  in  writing 
of  the  registered  holders  of  stock  trust  certificates  calling  for  a 
majority  in  amount  of  the  preferred  stock  of  the  Company  at  the 
time  outstanding. 

Eighth. — For  the  purposes  of  this  agreement,  any  consent  or  re- 
quest in  writing  by  the  holders  of  stock  trust  certificates  may  be  in 
any  number  of  concurrent  instruments  of  similar  tenor,  and  may  be 
executed  by  the  certificate  holders  in  person  or  by  agent  or  attorney 
appointed  by  an  instrument  in  writing.  Proof  of  the  execution  of 
any  such  consent,  or  of  a  writing  appointing  any  such  agent  or  at- 
torney, or  of  the  holding  by  any  person  of  stock  trust  certificates 


VOTING  TRUSTS  147 

issued  hereunder,  shall  be  sufficient  for  any  purpose  of  this  agree- 
ment, and  shall  be  conclusive  in  favor  of  the  Voting  Trustees  with 
regard  to  any  action  taken  by  them  under  such  consent,  if  made  in 
the  following  manner,  viz.:  (a)  The  fact  and  the  date  of  the  execu- 
tion by  any  person  of  any  such  consent  may  be  proved  by  the  cer- 
tificate of  any  notary  public,  or  other  officer,  authorized  to  take, 
either  within  or  without  the  State  of  New  York,  acknowledgments 
of  deeds  to  be  recorded  in  any  state,  certifying  that  the  person 
signing  such  consent  acknowledged  to  him  the  execution  thereof; 
or  by  the  affidavit  of  a  witness  to  such  execution,  (b)  The  amount 
of  stock  trust  certificates  held  by  any  person  executing  any  such 
consent  may  be  proved  by  the  books  of  the  Voting  Trustees. 

Ninth. — All  notices  to  be  given  to  the  holders  of  stock  trust  cer- 
tificates hereunder  shall  be  given  either  by  mail  to  the  registered 
holders  of  stock  trust  certificates  at  the  addresses  furnished  by  such 
holders  to  the  Voting  Trustees  or  to  the  agents  of  the  Voting  Trus- 
tees, or  by  pubHcation  in  two  daily  papers  of  general  circulation  in 
the  City  of  New  York  and  two  daily  papers  of  general  circulation 
in  the  city  of  London,  twice  in  each  week  for  two  successive  weeks; 
and  any  call  or  notice  whatsoever,  when  either  mailed  or  published 
by  the  Voting  Trustees  as  herein  provided,  shall  be  taken  and  con- 
sidered as  though  personally  served  on  all  the  holders  of  said  stock 
trust  certificates,  and  such  mailing  or  publication  shall  be  the 
only  notice  required  to  be  given  under  any  provision  of  this  agree- 
ment. 

Tenth. — The  term  Company,  for  the  purposes  of  this  agreement, 
and  for  all  rights  thereunder,  including  the  issue  and  delivery  of 
stock  certificates,  shall  be  taken  to  mean  the  said  corporation  or- 
ganized under  the  laws  of  the  State  of  Illinois,  or  any  successor  cor- 
poration or  corporations  with  or  into  which  the  same  may  be  con- 
solidated or  merged. 

In  Witness  Whereof,  as  of  the  day  and  year  first  hereinabove 
mentioned,  the  said  J.  P.  Morgan  &  Co.  have  signed  this  instru- 


148  FORMS  RELATING  TO 

ment,  and  the  Voting  Trustees  have  hereunto  set  their  hands  and 
seals. 

J.  P.  Morgan  &  Co., 
As  Reorganization  Managers,  as  above  stated. 
Attest: 

J.  PiERPONT  Morgan,  (L.  S.)  1 

George  F.  BAker,        (L.  S.)  [  Voting  Trustees. 

Robert  Fleming,  (L.  S.)  J 


EQUITABLE  LIFE  ASSURANCE  SOCIETY 

This  Agreement,  made  this  31st  day  of  December,  1910,  between 
J.  Pierpont  Morgan,  of  the  first  part,  and  Morgan  J.  O'Brien,  Lewis 
Cass  Ledyard,  George  W.  Perkins,  hereinafter  called  the  trustees,  of  the 
second  part,  witnesseth: 

Whereas,  an  agreement  made  on  the  15th  day  of  June,  1905,  wherein 
five  hundred  and  two  (502)  shares  of  the  capital  stock  of  the  Equitable 
Life  Assurance  Society  of  the  United  States,  a  corporation  of  the  State 
of  New  York,  were  transferred  to  trustees,  so  as  to  vest  the  trustees  with 
a  right  to  vote  thereon  for  the  term  of  five  years  from  the  15th  day  of 
June,  1905;  and 

Whereas,  the  rights  secured  to  the  trustees  by  said  agreement  expired 
on  the  15th  day  of  June,  1910,  and  the  party  of  the  first  part  is  desirous 
of  continuing  such  trust  for  the  period  and  upon  the  terms  hereinafter 
mentioned;  now  this  agreement  witnesseth: 

First. — That  the  party  of  the  first  part  hereby  transfers  to  the  par- 
ties of  the  second  part,  as  trustees  aforesaid,  five  hundred  and  two  (502) 
shares  of  the  capital  stock  of  the  Equitable  Life  Assurance  Society  of 
the  United  States,  for  the  purpose  of  vesting  in  the  trustees  the  right  to 
vote  thereon  for  the  term  and  upon  the  terms  and  conditions  stated  in 
this  agreement.  The  existing  certificate  of  stock  is  to  be  surrendered 
and  canceled  and  certificates  thereof  issued  to  the  trustees,  in  which 
certificates  it  shall  appear  that  the  same  were  issued  in  pursuance  to 


VOTING  TRUSTS  149 

this  agreement,  and  that  fact  shall  also  be  noted  in  the  entry  of  the 
trustees  as  owners  of  such  stock  in  the  proper  books  of  the  society. 

Second. — The  trustees  are  exclusively  authorized  to  exercise  the 
voting  power  on  the  stock  held  under  this  agreement  for  the  election  of 
directors  of  the  society,  and  shall,  at  every  annual  election  of  directors 
of  the  society,  so  vote  on  said  stock  that  out  of  every  thirteen  (13)  per- 
sons for  whom  such  vote  shall  be  cast  seven  (7)  shall  be  policyholders 
of  the  society,  selected  in  accordance  with  the  wishes  of  the  policy- 
holders of  the  society,  expressed  as  hereinafter  provided,  and  the  re- 
maining six  (6)  directors  shall  be  selected  by  the  trustees  in  their 
uncontrolled  discretion,  to  the  end  that,  of  the  entire  fifty-two  (52) 
directors,  twenty-eight  (28)  shall  be  policyholders  of  the  society, 
selected  by  or  on  behalf  of  the  policyholders,  and  twenty-four  (24)  shall 
be  lawfully  eligible  persons  selected  by  the  trustees  in  their  sole  discre- 
tion. 

The  wishes  of  the  policyholders  in  respect  of  the  directors  to  be  voted 
for  by  the  trustees  shall  be  expressed  in  the  following  manner:  In  each 
year,  at  any  time  prior  to  the  first  day  of  November,  any  holder  of  any 
policy  which  shall  have  been  in  force  for  one  year  or  more  may  send  to 
the  trustees,  at  the  Equitable  Building,  No.  120  Broadway,  New  York, 
a  written  request,  designating  policyholders  of  the  society  to  the  number 
of  not  more  than  seven-thirteenths  of  the  number  of  directors  to  be 
elected  at  the  next  ensuing  annual  election  of  directors,  for  whose  elec- 
tion as  directors  such  policyholder  desires  the  trustees  to  vote  at  such 
annual  election,  or  requesting  the  trustees  to  exercise  their  discretion 
on  his  behalf  in  the  selection  of  policyholders  to  act  as  such  directors. 

Third. — In  case  of  vacancies  in  the  board  of  directors,  due  to  resigna- 
tion, death,  or  other  cause,  the  trustees  may  make  recommendations  to 
the  directors  of  the  society  as  to  the  persons  to  be  elected  to  fill  such  va- 
cancies to  the  end  that  the  purpose  of  this  agreement  may  be  promptly 
and  effectually  accomplished. 

Fourth. — No  vote  shall  be  cast  upon  said  stock  for  any  purpose  except 


150  FORMS  RELATING  TO 

with  the  unanimous  approval  of  the  trustees,  but  the  trustees  may  em- 
power any  one  of  their  number  actually  to  cast  their  vote. 

Fifth. — Any  trustee  may  at  any  time  resign  by  deUvering  to  the 
other  trustees  his  resignation  in  writing.  In  case  of  the  death  or 
resignation  of  any  trustee,  the  vacancy  shall  forthwith  be  filled  by  an 
appointment  made  in  writing  by  the  remaining  trustees.  The  term 
"trustees"  whenever  used  herein  shall  include  the  parties  of  the  second 
part,  and  their  successors  so  appointed. 

Sixth. — The  party  of  the  first  part  shall  be  entitled  to  the  dividends 
on  the  stock  deposited  by  him  under  this  agreement. 

Seventh. — This  agreement  shall  continue  in  force  for  five  (5)  years 
from  the  date  hereof,  subject  to  be  terminated  by  the  party  of  the  first 
part  as  hereinafter  provided,  it  being  expressly  understood  and  agreed 
that  the  party  of  the  first  part  shall  have  the  right  at  any  time  during 
the  term  hereinbefore  mentioned  to  revoke  this  trust  by  serving  upon 
the  parties  of  the  second  part  therein  a  notice  in  writing  that  he  so  elects 
to  revoke  and  terminate  the  same  thirty  (30)  days  after  the  service  of 
such  notice  upon  the  parties  of  the  second  part  by  depositing  such 
notice  signed  by  the  party  of  the  first  part  in  the  mail  addressed  to  the 
parties  of  the  second  part  at  the  office  of  the  Equitable  Life  Assurance 
Society  of  the  United  States,  No.  120  Broadway,  New  York  City,  and 
this  agreement  and  the  trust  therein  provided  for  shall  at  once  cease 
and  determine,  and  all  rights  of  any  kind  or  description  thereunder  shall 
cease  and  be  at  an  end,  and  the  party  of  the  first  part  shall  be  entitled  to 
the  said  stock  and  to  all  the  rights  and  powers  incidental  thereto  as  if 
this  agreement  had  not  been  made. 

Eighth. — Every  other  stockholder  of  the  society  may  transfer  his 
stock  to  the  trustees,  to  be  held  subject  to  the  provisions  of  this  agree- 
ment, and  thereupon  may  participate  in  the  terms,  conditions  and 
privileges  thereof. 


VOTING  TRUSTS  151 

In  Witness  Whereof,  the  parties  hereto  have  set  their  hands  unto  five 
originals  hereof  the  day  and  year  first  above  written. 

J.  PiERPONT  Morgan, 
Morgan  J.  O'Brien, 
Lewis  Cass  Ledyard, 
Geo.  W.  Perkins. 

State  of  New  York,  County  of  New  York,  ss: 

On  this  17th  day  of  January,  1911,  before  me  personally  came 
J.  Pierpont  Morgan,  Morgan  J.  O'Brien,  Lewis  Cass  Ledyard,  and 
George  W.  Perkins,  to  me  known  and  known  to  me  to  be  the  persons 
described  in  and  who  executed  the  foregoing  trust  agreement,  and  they 
each  acknowledged  to  me  that  they  executed  the  same. 

[seal.]  Livingston  Platt, 

Notary  Public,  New  York  County. 

GENERAL  MOTORS  COMPANY 

This  Agreement,  made  in  the  city  of  New  York,  the  1st  day  of 
October,  1910,  by  and  between  such  owners  of  stock,  preferred  and 
common,  in  General  Motors  Co.  as  may  become  parties  to  this  agree- 
ment in  the  manner  hereinafter  provided  (hereinafter  termed  stock- 
holders), parties  of  the  first  part,  and  James  N.  Wallace,  Frederick 
Strauss,  James  J.  Storrow,  William  C.  Durant,  and  Anthony  N. 
Brady  (hereinafter  called  the  voting  trustees),  parties  of  the  second 
part,  witnesseth  as  follows: 

Whereas  the  General  Motors  Co.  has  been  organized  under  the 
laws  of  the  State  of  New  Jersey  with  an  authorized  capital  stock  of 
$60,000,000  divided  into  600,000  shares  of  $100  each,  of  which 
stock  to  the  amount  of  $20,000,000  is  preferred  stock,  and  stock  to  the 
amount  of  $40,000,000  is  common  stock,  and  of  said  preferred  stock, 
stock  to  the  amount  of  $17,835,400  has  been  issued,  and  of  said 
common  stock,  stock  to  the  amount  of  $20,374,030  has  been  issued; 
and 


152  FORMS  RELATING  TO 

Whereas  said  General  Motors  Co.  has  authorized  the  issue  of  its 
6  per  cent,  first  lien  five  year  sinking  fund  gold  notes  to  be  dated 
October  1,  1910,  to  be  payable  October  1,  1915,  to  bear  interest  at 
the  rate  of  6  per  cent,  per  annum,  payable  semi-annually  on  the  first 
days  of  April  and  October  in  each  year  and  to  be  secured  by  a  deed 
of  trust  to  Central  Trust  Co.  of  New  York,  as  trustee;  and 

Whereas,  as  additional  protection  to  said  notes  and  to  induce  the 
purchase  thereof,  the  stockholders  desire,  and  have  agreed,  further 
to  secure  the  payment  of  said  notes  by  the  transfer  and  delivery  to 
the  voting  trustees  under  the  terms  of  this  agreement,  of  the  shares 
held  by  them  of  the  capital  stock  of  the  General  Motors  Co.,  the 
certificate  for  said  shares  to  be  held  and  disposed  of  by  the  voting 
trustees  under  and  pursuant  to  the  terms  and  conditions  hereof; 
Now,  therefore,  in  consideration  of  the  premises: 

First. — Any  owner  of  fully  paid  stock  of  the  General  Motors  Co., 
preferred  or  common,  may  at  any  time  become  a  party  to  this  agree- 
ment by  transferring  to  the  voting  trustees  the  stock  held  by  him 
and  delivering  to  the  voting  trustees  the  certificates,  expressed  to  be 
fully  paid,  of  said  stock,  duly  indorsed  in  blank  or  accompanied  by 
proper  instruments  of  assignment  and  transfer  thereof,  in  blank  duly 
executed,  and  in  either  case,  properly  stamped  for  transfer  and  ac- 
cepting in  respect  thereof  a  certificate  or  certificates  issued  imder 
this  agreement.  Such  transfer  and  delivery  of  stock  and  acceptance 
of  a  certificate  issued  under  this  agreement  shall  have  the  same  force 
and  effect  as  though  such  stockholder  had  in  fact  subscribed  this 
agreement  under  seal. 

Second.— The  voting  trustees  do  agree  with  the  stockholders,  and 
with  each  and  every  holder  of  certificates  issued  as  hereinafter  pro- 
vided, that,  from  time  to  time,  upon  request,  they  will  cause  to  be 
issued  to  the  stockholders,  or  upon  their  order,  in  respect  of  all 
stock  so  transferred  to  the  voting  trustees  and  so  by  them  received 
from  the  stockholders,  certificates  in  substantially  the  following 
form: 


VOTING  TRUSTS  153 

(Preferred  stock  trust  certificate.) 

This  is  to  Certify  that,  as  hereinafter  provided 
will  be  entitled  to  receive  a  certificate  or  certificates,  expressed  to 
be  fully  paid,  for  shares  of  $100  each  in  the  preferred 

capital  stock  of  the  General  Motors  Co.,  and  in  the  meantime  to  re- 
ceive pajonents  equal  to  the  cash  dividends,  if  any,  collected  by  the 
undersigned  voting  trustees  upon  a  like  number  of  such  shares  stand- 
ing in  their  names.  Until  after  the  actual  delivery  of  such  certifi- 
cates, the  voting  trustees  shall  possess,  in  respect  of  any  and  all 
such  stock,  and  shall  be  entitled  to  exercise  all  rights  of  every  name 
and  nature,  including  the  right  to  vote  for  every  purpose  and  to 
consent  to  any  corporate  act  of  said  General  Motors  Co.;  it  being 
expressly  stipulated  that  no  voting  right  passes  by  or  under  this 
certificate,  or  by  or  under  any  agreement,  expressed  or  implied. 

This  certificate  is  issued  pursuant  to,  and  is  subject  to  the  terms 
and  conditions  of,  a  certain  agreement  dated  the  1st  day  of  Octo- 
ber, 1910,  by  and  between  owners  of  stock,  preferred  or  common,  in 
the  General  Motors  Co.,  and  James  N.  Wallace,  Frederick  Strauss, 
James  J.  Storrow,  William  C.  Durant,  and  Anthony  N.  Brady, 
voting  trustees. 

No  stock  certificate  shall  be  due  or  deliverable  hereunder  before 
the  1st  day  of  October,  1915,  nor  until  the  expiration  of  such  further 
period,  if  any,  as  shall  elapse  before  the  General  Motors  Co.  shall  have 
paid  all  its  6  per  cent,  first  lien  five-year  sinking  fund  gold  notes  at 
any  time  issued  under  its  deed  of  trust  dated  as  of  October  1,  1910, 
made  to  Central  Trust  Co.  of  New  York,  trustee.  The  voting  trus- 
tees may,  however,  make  earlier  delivery  at  any  time  in  their  abso- 
lute discretion. 

This  certificate  is  transferable  only  on  the  books  of  the  voting 
trustees  by  the  registered  holder,  either  in  person  or  by  attorney 
duly  authorized,  on  surrender  hereof;  and  until  so  transferred,  the 
voting  trustees  may  treat  the  registered  holder  as  owner  hereof  for 
all  purposes  whatsoever,  except  that  delivery  of  stock  certificates 
hereunder  shall  not  be  made  without  the  surrender  hereof. 


154  FORMS  RELATING  TO 

This  certificate  is  not  valid  unless  duly  signed  on  behalf  of  the 
undersigned  voting  trustees  by  Central  Trust  Co.  of  New  York, 
their  agent,  and  also  registered  by  the  Columbia  Trust  Co.,  as  registrar. 
In  Witness  Whereof,  said  voting  trustees  have  caused  this  certif- 
icate to  be  signed  by  Central  Trust  Co.  of  New  York,  their  duly 
authorized  agent  for  that  purpose,  this  day  of  ,  19    . 

James  N.  Wallace, 
Frederick  Strauss, 
James  J.  Storrow,       •  Voting  Triistees. 
William  C.  Durant, 
Anthony  N.  Brady, 

by   

Central  Trust  Co.  of  New  York, 
Vice  President. 
Registered  this  day  of  ,  19    . 

The  Columbia  Trust  Co., 
Registrar. 

by 

Vice  President. 

(Common  stock  trust  certificate.) 

This  is  to  certify  that,  as  hereinafter  provided 
will  be  entitled  to  receive  a  certificate  or  certificates,  expressed  to 
be  fully  paid,  for  shares  of  $100  each,  in  the  common  cap- 

ital stock  of  the  General  Motors  Co.,  and  in  the  meantime  to  receive 
paj'ments  equal  to  the  cash  dividends,  if  any,  collected  by  the  under- 
signed voting  trustees  upon  a  like  number  of  such  shares  standing 
in  their  names.  Until  after  the  actual  delivery  of  such  certificates, 
the  voting  trustees  shall  possess,  in  respect  of  any  and  all  such 
stock,  and  shall  be  entitled  to  exercise,  all  rights  of  every  name  and 
nature,  including  the  right  to  vote  for  every  purpose  and  to  consent 
to  any  corporate  act  of  said  General  Motors  Co.;  it  being  expressly 
stipulated  that  no  voting  right  passes  by  or  under  this  certificate,  or 
by  or  under  any  agreement  expressed  or  implied. 

This  certificate  is  issued  pursuant  to,  and  is  subject  to  the  terms 
and  conditions  of,  a  certain  agreement  dated  the  1st  day  of  October, 


VOTING  TRUSTS  155 

1910,  by  and  between  owners  of  stock,  preferred  or  common,  in  the 
General  Motors  Co.,  and  James  N.  Wallace,  Frederick  Strauss,  James 
J.  Storrow,  William  C.  Durant,  and  Anthony  N.  Brady,  voting  trustees. 

No  stock  certificate  shall  be  due  or  deliverable  hereunder  before 
the  1st  day  of  October,  1915,  nor  until  the  expiration  of  such  further 
period,  if  any,  as  shall  elapse  before  the  General  Motors  Co.  shall  have 
paid  all  its  6  per  cent,  first  lien  five-year  sinking  fund  gold  notes  at  any 
time  issued  under  its  deed  of  trust  dated  as  of  October  1,  1910,  made 
to  Central  Trust  Co.  of  New  York,  trustee.  The  voting  trustees  may, 
however,  make  earlier  delivery  at  any  time  in  their  absolute  discretion. 

This  certificate  is  transferable  only  on  the  books  of  the  voting 
trustees  by  the  registered  holder,  either  in  person  or  by  attorney 
duly  authorized,  on  surrender  hereof;  and  until  so  transferred,  the 
voting  trustees  may  treat  the  registered  holder  as  owner  hereof  for 
all  purposes  whatsoever,  except  that  delivery  of  stock  certificates 
hereunder  shall  not  be  made  without  the  surrender  hereof. 

This  certificate  is  not  valid  unless  duly  signed  on  behalf  of  the 
undersigned  voting  trustees  by  Central  Trust  Co.  of  New  York, 
their  agent,  and  also  registered  by  the  Columbia  Trust  Co.  as  registrar. 

In  Witness  Whereof,  said  voting  trustees  have  caused  this  certif- 
icate to  be  signed  by  Central  Trust  Co.  of  New  York,  their  duly 
authorized  agent  for  that  purpose,  this  day  of  ,  19    . 

James  N.  Wallace, 

Frederick  Strauss, 

James  J.  Storrow,       •  Voting  Trustees. 

William  C.  Durant, 

Anthony  N.  Beady, 

by  

Central  Trust  Co.  of  New  York, 
Vice  President. 
Registered  this  day  of  ,  19    . 

The  Columbia  Trust  Co., 
Registrar. 

by  - 

Vice  President. 


156  FORMS  RELATING  TO 

Third. — On  the  1st  day  of  October,  1915,  if  the  General  Motors 
Co.  shall  then  have  paid  all  its  6  per  cent,  first  lien  five-year  sinking 
fund  gold  notes  at  any  time  issued  under  its  deed  of  trust  dated 
October  1,  1910,  made  to  Central  Trust  Co.  of  New  York,  or,  if  not, 
then  as  soon  as  all  said  notes  shall  have  been  so  paid,  or  whenever, 
earlier,  the  voting  trustees  shall  decide  to  make  such  delivery,  the 
voting  trustees  in  exchange  for,  and  upon  surrender  of,  any  stock 
trust  certificate  then  outstanding,  will,  in  accordance  with  the  terms 
thereof,  and  on  payment,  if  the  voting  trustees  shall  so  require,  of 
a  sum  sufficient  to  reimburse  them  for  any  stamp  tax  or  other 
governmental  charge  in  connection  with  such  delivery,  deliver,  at 
their  office  or  agency  in  the  borough  of  Manhattan  in  the  city  of 
New  York,  certificates  of  stock  of  the  General  Motors  Co.,  and  may 
require  the  holders  of  stock  trust  certificates  to  exchange  them  for 
certificates  of  capital  stock.  Whenever,  pursuant  to  the  foregoing 
provisions  of  this  article,  certificates  of  capital  stock  of  the  General 
Motors  Co.  shall  become  deliverable,  or  at  any  time  thereafter,  the 
voting  trustees  may  deposit  with  Central  Trust  Co.  of  New  York, 
or  other  trust  company  in  good  standing  having  an  office  in  the 
borough  of  Manhattan  in  the  city  of  New  York,  stock  certificates, 
duly  indorsed  in  blank  or  accompanied  by  proper  instruments  of 
assignment  and  transfer  in  blank,  duly  executed  to  a  par  amount,  of 
each  class  of  stock,  equal  to  the  amount  of  stock  called  for  by  the 
outstanding  stock  trust  certificates  for  such  class  of  stock,  with 
authority  to  such  depositary  to  make  delivery  thereof  in  exchange 
for  stock  trust  certificates,  and  thereupon  all  further  obligation  or 
duty  of  the  voting  trustees  under  this  agreement  shall  terminate. 

Fourth. — If,  prior  to  the  delivery  pursuant  to  article  third  of  cer- 
tificates of  stock  of  the  General  Motors  Co.  in  exchange  for  stock 
trust  certificates,  or  the  deposit  pursuant  to  article  third  of  stock 
certificates  for  the  purpose  of  such  delivery,  any  dividend  on  the 
stock  of  the  General  Motors  Co.  of  either  class,  shall  be  declared 
and  paid  or  distributed  in  fully  paid  stock  of  said  General  Motors 
Co.,  the  respective  holders  of  stock  trust  certificates  calling  for 


VOTING  TRUSTS  157 

stock  of  the  class  on  which  such  stock  dividend  shall  be  so  declared 
and  paid  or  distributed,  shall  be  entitled  to  the  delivery  of  proper 
stock  trust  certificates  issued  under  this  agreement  for  stock  to  the 
amount  received  by  the  voting  trustees,  as  such  dividend,  upon  a 
like  number  of  such  shares  standing  in  the  names  of  the  voting 
trustees.  The  voting  trustees  shall  not,  in  any  event,  be  required, 
in  respect  of  any  such  dividend  in  stock,  to  deliver  stock  trust  cer- 
tificates calling  for  a  fraction  of  a  share,  but  may,  in  lieu  thereof, 
deliver,  in  respect  of  fractional  interest,  scrip  in  such  form  as  the 
voting  trustees  may,  in  their  uncontrolled  discretion,  determine. 

Fifth. — Any  voting  trustee  may  at  any  time  resign  by  delivering 
to  the  other  voting  trustees  at  the  office  of  the  agent  of  the  voting 
trustees  for  the  transfer  of  stock  trust  certificates  in  writing  his 
resignation,  to  take  effect  10  days  thereafter,  and  in  every  case  of 
death,  resignation,  or  the  inability  of  any  voting  trustee  to  act,  the 
vacancy  so  occurring  shall  be  filled  by  the  appointment  of  a  suc- 
cessor or  successors,  to  be  made  by  a  majority  of  the  other  voting 
trustees  by  a  written  instrument.  The  term  voting  trustees  as  used 
herein  and  in  said  stock  trust  certificates  shall  apply  to  the  parties  of 
the  second  part  and  their  successors  hereunder.  Notwithstanding  any 
change  in  the  voting  trustees,  the  voting  trustees  for  the  time  being 
may  adopt  and  issue  stock  trust  certificates  in  the  names  of  the  original 
voting  trustees,  the  parties  hereto  of  the  second  part. 

Sixth. — The  action  of  a  majority  of  the  voting  trustees  expressed 
from  time  to  time  at  a  meeting  shall,  except  as  otherwise  herein 
stated,  constitute  the  action  of  the  voting  trustees  and  have  the 
same  effect  as  if  assented  to  by  all.  At  any  meeting  of  the  voting 
trustees  any  voting  trustee  may  vote  in  person  or  by  proxj'^  to  any 
other  voting  trustee.  The  voting  trustees  may  adopt  their  own 
rules  of  procedure.  Any  voting  trustee  may  act  as  a  director  or 
officer  of  the  General  Motors  Co.,  or  of  any  subsidiary  or  controlled 
company;  and  he,  or  any  firm  of  which  he  may  be  a  member,  or 
any  corporation  of  which  he  may  be  a  stockholder,  director  or  officer, 


158  FORMS  RELATING  TO 

may  contract  with  said  General  Motors  Co.  or  any  subsidiary  or 
controlled  company,  or  be  or  become  pecuniarily  interested  in  any 
matter  or  transaction  to  which  said  General  Motors  Co.  or  any  sub- 
sidiary or  controlled  company  may  be  a  party,  or  in  which  it  may 
in  any  way  be  concerned,  as  fully  as  though  he  were  not  a  voting 
trustee. 

Seventh. — In  voting  the  stock  held  by  them  (which  they  may  do 
either  in  person  or  by  proxy  to  any  one  of  them  or  to  any  other 
person  or  persons),  the  voting  trustees  will  exercise  their  best  judg- 
ment from  time  to  time  to  select  suitable  directors,  to  the  end  that 
the  affairs  of  the  General  Motors  Co.  shall  be  properly  managed, 
and,  in  voting  and  in  acting  on  other  matters  which  may  come  be- 
fore them  at  any  stockholders'  meeting,  will  exercise  like  judgment; 
but  they  assume  no  responsibility  in  respect  to  such  management 
or  in  respect  to  any  action  taken  by  them  or  in  pursuance  of  their 
consent  thereto  as  such  stockholders,  or  pursuant  to  their  votes  so 
cast,  and  no  voting  trustee  incurs  any  responsibility  by  reason  of 
any  error  of  law  or  of  any  matter  or  thing  done  or  omitted  under 
this  agreement,  except  for  his  own  wilful  malfeasance. 

Eighth. — The  Voting  trustees  possess,  and  shall  be  entitled,  in 
their  discretion  to  exercise,  all  rights  and  powers  of  absolute  owners 
of  said  stock  including  the  right  to  vote  for  every  purpose  and  to 
consent  to  any  corporate  act  of  said  General  Motors  Co.  The  voting 
trustees  will  not,  however,  during  the  pendency  of  this  agreement, 
vote  in  respect  of  the  shares  of  the  capital  stock  of  said  General 
Motors  Co.  held  by  them,  to  authorize  any  increase  in  the  amount 
of  the  preferred  stock  of  said  General  Motors  Co.  at  present  au- 
thorized, viz. :  $20,000,000,  except  with  the  consent,  given  at  a  meet- 
ing called  by  the  voting  trustees  for  the  purpose,  of  holders  of  a 
majority  of  such  part  of  the  trust  certificates  for  each  class  of  stock 
of  said  company  as  shall  be  represented  at  such  meeting,  the  holders 
of  each  class  of  trust  certificates  voting  separately  and  either  in 
person  or  by  proxy;   and  the  voting  trustees  will  not,  during  the 


VOTING  TRUSTS  159 

pendency  of  this  agreement,  vote  in  respect  of  the  shares  of  the 
stock  of  said  General  Motors  Co.  held  by  them,  to  authorize  any 
increase  in  the  amount  of  the  common  stock  of  said  General  Motors 
Co.  at  present  authorized,  viz.:  $40,000,000,  except  with  the  consent, 
given  at  a  meeting  called  by  the  voting  trustees  for  the  purpose,  of 
the  holders  of  a  majority  of  such  part  of  the  trust  certificates  for 
the  common  stock  of  said  company  as  shall  be  represented  at  such 
meeting;  the  holders  of  such  trust  certificates  voting  either  in  person 
or  by  proxy. 

Ninth. — All  notices  to  be  given  to  the  holders  of  trust  certificates 
hereunder  shall  be  inserted  in  two  daily  papers  of  general  circula- 
tion published  in  the  City  of  New  York,  and  in  a  daily  paper  of  general 
circulation  published  in  the  City  of  Boston,  Mass.,  twice  in  each  week 
for  four  successive  weeks.  Any  call  or  notice  whatsoever,  when  so  pub- 
lished by  the  voting  trustees,  shall  be  taken  and  considered  as  though 
personally  served  on  all  parties  hereto,  including  the  holders  of  said 
trust  certificates,  and  upon  all  parties  becoming  bound  hereby  as  of 
the  respective  dates  of  insertion  thereof,  and  such  publication  shall 
be  the  only  notice  required  to  be  given  under  any  provision  of  this 
agreement. 

Tenth. — This  agreement  may  be  simultaneously  executed  in  several 
counterparts,  each  of  which,  so  executed,  shall  be  deemed  to  be  an 
original;  and  such  counterparts  shall  together  constitute  but  one 
and  the  same  instrument. 

In  Witness  Whereof,  the  voting  trustees,  the  parties  of  the  second 
part,  have  hereunto  set  their  hands  and  seals  in  the  City  of  New 
York  the  day  and  year  first  hereinabove  mentioned,  and  the  parties 
of  the  first  part  have  transferred  and  delivered  their  stock  and  ac- 
cepted certificates  issued  under  this  agreement. 

James  N.  Wallace, 

Frederick  Strauss, 

James  J.  Storrow,     •  Votiyig  Trustees. 

W.  C.  Durant, 

Anthony  N.  Brady, 


160  FORMS  RELATING  TO 


BALTIMORE  AND  OHIO  RAILROAD  COMPANY 

Preferred  Stock  Trust  Certificate 

This  is  to  Certify  that  on  the  1st  day  of  March,  1904, 

will  be  entitled  to  receive  a  certificate  or  certificates  for 
fully  paid  shares  of  $100  each  in  the  preferred  capital  stock  of 
the  Baltimore  &  Ohio  Railroad  Co.  and  in  the  meantime  to  receive 
payments  equal  to  the  dividends,  if  any,  collected  by  the  under- 
signed Voting  Trustees  upon  a  like  number  of  such  shares  standing  in 
their  names;  and  until  after  the  actual  delivery  of  such  certificates  the 
Voting  Trustees  shall  possess  and  be  entitled  to  exercise  all  rights  of 
every  name  and  nature,  including  the  right  to  vote  in  respect  of  any 
and  all  such  stock,  it  being  expressly  stipulated  that  no  voting  right 
passes  by  or  under  this  certificate,  or  by  or  under  any  agreement 
express  or  implied. 

This  certificate  is  issued  imder  and  pursuant  to  the  terms  and 
conditions  of  a  certain  agreement  dated  June  22,  1898,  by  and  be- 
tween Speyer  &  Co.  and  Kuhn,  Loeb  &  Co.,  of  New  York,  and 
Speyer  Bros.,  of  London,  as  reorganization  managers,  and  the  under- 
signed Voting  Trustees. 

No  stock  certificate  shall  be  due  or  deliverable  hereunder  until 
the  1st  day  of  March,  1904,  but  the  Voting  Trustees,  in  their  dis- 
cretion, may  make  earlier  delivery. 

This  certificate  is  transferable  only  on  the  books  of  the  Voting 
Trustees  by  the  registered  holder,  either  in  person  or  by  attorney  duly 
authorized,  according  to  the  rules  established  for  that  purpose  by 
the  Voting  Trustees,  and  on  surrender  hereof,  and  until  so  trans- 
ferred, the  Voting  Trustees,  may  treat  the  registered  holder  as  owner 
hereof  for  all  purposes  whatsoever,  except  that  delivery  of  stock 
certificates  hereunder  shall  not  be  made  without  the  surrender  hereof. 

This  certificate  is  not  valid  unless  duly  signed  on  behalf  of  the 
Voting  Trustees  by  Speyer  &  Co.,  as  agents,  and  also  registered  by 
the  Mercantile  Trust  Co.  of  New  York,  as  registrar. 

In  Witness  Whereof,  the  said  Voting  Trustees  have  caused  this 


VOTING  TRUSTS  161 

certificate  to  be  signed  by  Speyer  &  Co.,  their  duly  authorized 
agents,  this  day  of  ,  189  . 

William  Salomon, 
Abraham  Wolff, 

J.  Kennedy  Tod,         •  Voting  Trustees. 
Louis  Fitzgerald, 
Charles  H.  Coster, 

by  their  agents  hereunder, 
Registered  this  day  of  ,  189  . 

The  Mercantile  Trust  Co., 

Registrar. 
by 

CALIFORNIA  PETROLEUM  CORPORATION 
No Shares. 

Incorporated  under  the  Laws  of  the  State  of  Virginia 
Common  Stock  Trust  Certificate 

This  is  to  Certify  that  as  hereinafter  provided,  on  surrender 
hereof  and  upon  pajTiient  if  the  Voting  Trustees  shall  so  require  of 
a  sum  sufficient  to  reimburse  them  for  any  stamp  tax  or  other 
governmental  charge  in  connection  with  such  delivery, 

will  be  entitled  to  receive  a  certificate  or  certificates 
expressed  to  be  fully  paid  for  shares  of  the  par  value  of 

$100  each,  in  the  Common  Capital  Stock  of  the  California  Petroleum 
Corporation;  and,  in  the  meantime,  to  receive  payments  equal  to 
the  dividends,  if  any,  collected  by  the  undersigned  Depositary  upon 
a  like  number  of  such  shares  standing  in  its  name  as  agent  of  the 
Voting  Trustees,  such  dividends,  if  received  by  the  Depositary  in 
stock  of  said  Corporation,  to  be  payable  in  trust  certificates. 

This  certificate  is  issued  pursuant  to,  and  is  subject  to  the  terms 
and  conditions  of,  a  certain  Agreement  lodged  with  the  Depositary, 
dated  October  1,  1912,  between  owners  of  common  stock  in  Cali- 
fornia Petroleum  Corporation,  and  the  undersigned  Voting  Trustees 
and  Depositary.     No  stock  certificate  shall  be  due  or  deliverable 


162  FORMS  RELATING  TO 

hereunder  before  October  1,  1917,  unless  the  Voting  Trustees,  in 
their  unrestricted  discretion,  shall  determine  to  authorize  such  de- 
livery prior  to  said  date  as  in  said  Agreement  provided.  Until  the 
actual  transfer  of  such  stock  certificates  to  the  registered  owner 
hereof,  the  Voting  Trustees,  singly  or  collectively  as  in  said  Agree- 
ment provided,  shall  possess  and  be  entitled  in  their  discretion  to 
exercise,  in  respect  of  any  and  all  such  stock,  through  the  Depositary, 
all  rights  of  every  name  and  nature  including  the  right  to  vote 
thereon  for  every  purpose  and  to  consent  to  any  corporate  act  of 
said  corporation  as  provided  in  said  Agreement,  it  being  expressly 
stipulated  that  no  voting  right  passes  by  or  under  this  certificate, 
or  by  or  imder  any  agreement  express  or  implied. 

This  certificate  is  transferable  at  the  office  of  the  Depositary  for  the 
time  being  under  said  Agreement,  on  surrender  hereof  by  the  registered 
holder  in  person  or  by  attorney  duly  authorized,  in  accordance  with  the 
rules  from  time  to  time  established  by  the  Voting  Trustees,  and,  until  so 
transferred,  the  Voting  Trustees  and  the  Depositary  may  treat  the  regis- 
tered holder  as  the  owner  of  this  certificate  for  all  purposes  whatsoever. 

This  certificate  is  not  valid  unless  signed  on  behalf  of  the  Voting 
Trustees  by  the  Depositary  for  the  time  being  under  said  Agree- 
ment as  their  agent,  and  also  registered  by  the  Registrar  for  the 
time  being  under  said  Agreement. 

In  Witness  Whereof,  the  said  Voting  Trustees  have  caused  this 
certificate  to  be  signed  on  their  behalf  by  the  Depositary,  their  duly 
authorized  agent  for  that  purpose,  this  day  of  ,  19    . 

E.   L.    DOHENY,       1 

G.  G.  Henry,       J-  Voting  Trustees. 
C.  A.  Canfield,  J 

by  their  agent, 
Columbia-Knickerbocker  Trust  Company, 

Depositary. 
by 

Registered  this ,  19 . . . 

United  States  Mortgage  and  Trust  Company, 

Registrar. 
by 


VOTING  TRUSTS  163 

THE  CINCINNATI,  HAMILTON  AND  DAYTON  RAILROAD 

COMPANY 

Trust  Certificate 

This  is  to  certify  that  and  assigns 

entitled  to  shares  of  one  hundred  dollars  each  of  the 

beneficial  interest  in  the  capital  stock  of  the  Cincinnati,  Hamilton  and 
Dayton  Railroad  Company,  certificates  of  which  are  issued  to  Hugh  J. 
Jewett,  Casimir  L.  Werk,  and  A.  S.  Winslow,  as  trustees,  under  and  in 
pursuance  of  a  certain  trust  agreement  made  in  the  year  1886,  between 
certain  stockholders  of  said  company  and  the  said  Hugh  J.  Jewett, 
Casimir  L.  Werk  and  A.  S.  Winslow,  as  trustees  under  said  agreement. 

The  holder  of  this  certificate  is  entitled  to  the  beneficial  rights  and 
interest  provided  in  and  by  the  said  trust  agreement,  including  a 
proportionate  share  of  all  dividends  declared  and  paid  on  the  stock  of 
the  Cincinnati,  Hamilton  &  Dayton  Railroad  Company,  held  in  trust 
as  aforesaid. 

In  Witness  Whereof,  the  said  trustees  have  caused  this  certificate  to 
be  signed  by  one  of  said  trustees,  and  countersigned  by  their  secretary, 
at  Cincinnati,  this  day  of  a.  d.  18    . 

INTERNATIONAL  HARVESTER  COMPANY 

No Shares. 

Stock  Trust  Certificate 

This  certifies,  that,  as  hereinafter  provided, 
will  be  entitled  to  receive  a  certificate  or  certificates  for 
fully  paid  shares  of  one  hundred  dollars  each,  of  the  capital  stock  of  the 
International  Harvester  Company,  and,  in  the  meantime,  to  receive 
payments  equal  to  the  dividends,  if  any,  collected  by  the  undersigned 
Voting  Trustees  upon  a  like  number  of  such  shares  standing  in  their 
names;  such  dividends,  if  received  by  the  Voting  Trustees  in  stock  of 
said  Company,  to  be  payable  in  stock  trust  certificates.  Until  the 
actual  deUvery  of  such  stock  certificates,  the  Voting  Trustees  shall 
possess,  in  respect  of  any  and  all  of  such  stock,  and  shall  be  entitled,  in 


164  FORMS  RELATING  TO 

their  discretion,  to  exercise,  all  rights  and  powers  of  absolute  owners  of 
said  stock,  including  the  right  to  vote  for  every  purpose  and  to  consent 
to  any  corporate  act  of  said  Company;  it  being  expressly  stipulated  that 
no  voting  right  passes  by  or  under  this  certificate,  or  by  or  under  any 
agreement  expressed  or  implied. 

This  certificate  is  issued  pursuant  to,  and  the  rights  of  the  holder  are 
subject  to,  and  hmited  by,  the  terms  and  conditions  of  a  certain  agree- 
ment, dated  the  thirteenth  day  of  August,  1902,  by  and  between 
William  C.  Lane  and  the  undersigned  Voting  Trustees. 

Stock  certificates  shall  be  due  and  deliverable  in  exchange  for  stock 
trust  certificates  on,  but  not  before,  August  1,  1912,  unless  a  majority 
of  the  Voting  Trustees  elect,  as  they  may,  to  terminate  said  agreement 
after  August  1, 1907,  upon  not  less  than  ninety  days'  notice. 

This  certificate  is  transferable  only  on  the  books  of  the  Voting 
Trustees  by  the  registered  holder  thereof,  either  in  person  or  by  attorney 
duly  authorized  according  to  rules  established  for  that  purpose  by  the 
Voting  Trustees,  and  on  surrender  hereof;  and,  until  so  transferred,  the 
Voting  Trustees  may  treat  the  registered  holder  as  owner  hereof  for  all 
purposes  whatsoever,  except  that  they  shall  not  be  required  to  deliver 
stock  certificates  hereunder  without  surrender  hereof. 

This  certificate  is  not  valid  unless  duly  signed  on  behalf  of  the 
undersigned  Voting  Trustees  by  ,  their  agents, 

and  also  registered  by  ,  as  Registrar. 

In  Witness  Whereof,  the  undersigned  Voting  Trustees  have  caused 
this  certificate  to  be  signed  by  their  duly  authorized  agents, 

,  this  day  of  ,  one  thousand  nine  hun- 

dred and 

by 

by 

Registered  this  day  of  ,  19 


by 


Voting  Trustees 
Their  Agents. 
President. 
Registrar. 
Secretary. 


VOTING  TRUSTS  165 

MOBILE  AND  OHIO  RAILROAD  COMPANY 

Be  it   known   that  entitled   to 

shares  of  the  capital  stock  of  the  Mobile  &  Ohio  Railroad  Company, 
One  Hundred  Dollars  per  share  having  been  paid  on  the  same,  said 
shares  being  transferable  on  the  books  of  the  company  only  by  the 
above  named  in  person  or  by  attorney  upon 

the  surrender  of  this  certificate  and  subject  to  the  power  of  attorney 
herein  referred  to. 

It  is  understood  and  declared  that  the  ownership  by  the  said 
and  his  assigns  of  the  said  shares  of  stock 

entitles  them  to  all  the  rights  and  privileges  which  pertain  to  the 
ownership  of  the  said  shares,  including  the  right  to  such  dividends 
and  profits  as  shall  be  ascertained  and  declared  upon  the  capital 
stock  of  the  said  company,  saving  and  excepting  that  such  ownership 
is  subject  to  a  power  and  authority  heretofore  granted  by  the  owner 
of  said  shares  to  the  Farmers'  Loan  &  Trust  Company  in  trust  for 
the  benefit  and  security  of  the  preferred  Income  and  Sinking  Fund 
Debentures  issued  by  said  Railroad  Company,  by  virtue  of  which 
power  and  authority  the  said  Farmers'  Loan  &  Trust  Company  is 
and  its  successors  will  be  entitled,  in  person  or  by  proxy,  to  vote 
upon  the  said  shares  of  stock  at  all  meetings  of  the  stockholders  of 
the  said  Company  which  may  be  hereafter  for  any  purpose  convened 
during  the  continuance  of  said  trust,  and  so  to  vote  in  the  name  of 
either  the  present  or  future  holders  of  said  shares,  or  in  the  name  of 
the  said  Farmers'  Loan  &  Trust  Company,  or  its  successors  or  proxies. 

In  Witness  Whereof,  the  signature  of  the  president  and  the  counter 
signature  of  the  secretary  and  the  seal  of  said  company  are  herewith 
affixed  this  day  of  ,  18    . 

NEW  ORLEANS  TERMINAL  COMPANY 

Stock  Trust  Certificate 

No Shares. 

This  is  to  certify  that  is  entitled  to  the 


166  FORMS  RELATING  TO 

rights,  privileges  and  benefits  set  forth  in  a  certain  voting  trust 
agreement  between  Southern  Railway  Company  and  St.  Louis  and 
San  Francisco  Railroad  Company,  parties  of  the  first  part,  and  the 
Standard  Trust  Company  of  New  York,  party  of  the  second  part, 
dated  December  31,  1903,  in  respect  of  shares  of  the  capital  stock 
of  New  Orleans  Terminal  Company;  which  shares  have  been 
transferred  to  and  are  now  held  by  the  undersigned  as  Trustee 
under,  pursuant  to  and  as  provided  in  said  voting  trust  agree- 
ment. 

This  certificate  is  issued  in  accordance  with  the  provisions  of  said 
voting  trust  agreement  and  is  subject  to  the  provisions,  terms  and 
conditions  thereof. 

The  interest  in  said  shares  of  the  capital  stock  of  the  New  Orleans 
Terminal  Company,  evidenced  by  said  voting  trust  agreement  and 
by  this  certificate,  is  transferable  only,  subject  to  the  conditions, 
stipulations  and  contingent  forfeiture  set  forth  in  said  voting  trust 
agreement,  upon  the  books  of  the  undersigned  Trustee  at  its  office 
in  the  City  of  New  York,  by  the  registered  holder  of  this  certificate, 
in  person  or  by  attorney,  upon  the  surrender  of  this  certificate  prop- 
erly endorsed. 

In  Witness  Whereof,  The  Standard  Trust  Company  of  New  York 
has  caused  these  presents  to  be  signed  by  its  President  or  Vice  Presi- 
dent, and  its  corporate  seal  to  be  hereto  aflSxed  and  to  be  attested 
by  its  Secretary,  or  Assistant  Secretary,  this  day  of  , 

A.  D.  19    . 

The  Standard  Trust  Company  of  New  York, 

Trustee. 

(L.  S.)  by -- 

President. 

Attest: 

Secretary. 


VOTING  TRUSTS  167 

PITTSBURGH  AND  LAKE  ERIE  RAILROAD  COMPANY 

Shares  $50.  Each  Special  Stock. 

This  certificate  entitles 


to 


of  the  capital  stock 
The  Pittsburgh  &  Lake  Erie  R.  R.  Co.  standing  in  the  name 
of  the  Trustees,  in  whom  is  vested  the  perpetual  power  of  voting 
the  same,  as  per  agreement  of  20th  October,  1877;  transferable  on 
the  special  stock  book  of  said  company,  in  person  or  by  attorney, 
on  surrender  of  this  certificate. 

In  Witness  Whereof,  the  said  trustees,  by  their  duly  appointed 
agent,  have  hereto  set  their  hands  and  seals,  this  day  of 

,  18    . 


Pittsburgh. 


(L.  S.)  (L.  S.) 

(L.  S.)  (L.  S.) 

.(L.  S.)  .(L.  S.) 


POPE  MANUFACTURING  COMPANY 

No Shares. 

Five  per  cent.  Second  Preferred  Stock  (Cumulative  after  February  1, 
1905)  Trust  Certificate. 
The  Central  Trust  Company  of  Now  York  having  received  upon 
deposit  and  in  trust  from  George  F.  Crane,  F.  S.  Smithers  and 
Albert  A.  Pope,  voting  trustees,  certificates  representing  one  hundred 
thousand  (100,000)  shares  of  the  second  preferred  stock  of  the  Pope 
Manufacturing  Company  of  the  par  value  of  one  hundred  dollars 
($1(X))  each,  and  under  the  provisions  of  the  agreement  dated  the 


168  FORMS  RELATING  TO 

fifteenth  day  of  May,  1903,  between  William  A.  Read,  Frederic  P. 
Olcott,  George  F.  Crane,  Colgate  Hoyt  and  F.  S.  Smithers,  a  com- 
mittee, and  George  F.  Crane,  F.  S.  Smithers  and  Albert  A.  Pope, 
voting  trustees,  to  which  agreement  the  holders  hereof  assent  by 
accepting  this  certificate,  hereby  certifies  that 

is  entitled  to  an  undivided  equitable  interest  in  said  deposited 
shares  equivalent  to  shares  of  said  second  preferred  stock 

of  the  Pope  Manufacturing  Company,  without,  however,  the  right 
to  vote  upon  any  of  said  shares,  which  right,  as  well  as  all  other  rights 
appertaining  to  said  shares,  except  such  as  in  and  by  said  agreement 
expressly  provided  are  vested  exclusively  in  and  are  to  be  exercised 
by  the  voting  trustees  named  in  said  agreement  and  their  successors. 

The  owner  of  this  certificate  will  be  entitled  to  receive  payments 
equal  to  the  dividends,  if  any,  collected  by  the  voting  trustees  upon 
the  like  number  of  shares  and  paid  over  to  this  company. 

The  powers  of  the  voting  trustees  mth  respect  to  the  shares  of 
stock  of  the  Pope  Manufacturing  Company  held  in  trust,  as  afore- 
said, will  continue  for  the  period  of  five  (5)  years  from  the  first  day 
of  February,  1903,  imless  sooner  terminated  by  them  as  provided 
in  the  said  agreement. 

The  voting  trustees  shall  not  consent  that  any  mortgage  be  put 
upon  the  property  of  the  Pope  Manufacturing  Company  or  any 
part  thereof,  or  that  the  amount  of  the  first  preferred  or  second  pre- 
ferred stock  be  increased  except  with  the  consent  of  the  holders  of 
three-fourths  in  amount  of  first  preferred  stock  trust  certificates, 
or  that  the  amount  of  second  preferred  stock  be  increased  except 
with  the  consent  of  the  holders  of  two-thirds  in  amount  of  the  second 
preferred  stock  trust  certificates  and  two-thirds  in  amount  of  the 
common  stock  trust  certificates,  to  be  given  in  the  manner  pre- 
scribed in  and  by  said  agreement. 

Upon  the  termination  of  the  trust  upon  which  the  said  shares  of 
stock  are  deposited,  the  holder  hereof  will  be  entitled  to  receive  from 
this  company  upon  surrender  of  this  certificate  shares  of  the 

second  preferred  capital  stock  of  said  Pope  Manufacturing  Company. 


VOTING  TRUSTS  169 

The  interest  in  said  shares  of  stock  represented  by  this  certificate 
is  assignable  only  by  transfer  upon  the  books  kept  by  this  company 
for  that  purpose  by  the  holder  hereof  in  person  or  by  proxy  upon 
surrender  of  this  certificate  properly  assigned. 

This  certificate  is  issued  pursuant  to  and  is  subject  to  the  terms 
and  conditions  of  said  agreement  of  May  15,  1903,  by  and  iDctween 
the  said  committee  and  the  said  voting  trustees.  This  certificate  is 
not  valid  unless  duly  signed  by  an  officer  of  this  company  and  also 
registered  by  ,  as  registrar. 

Dated  New  York,  ,  19    . 

Central  Trust  Company  of  New  York, 

by Vice  President. 

Secretary. 

Registered  this  day  of  ,  19    . 

Registrar. 


STANDARD  OIL  TRUST 

Shares  $100  each. 
Number  Shares. 

This  is  to  Certify  that  is  entitled  to 

shares  in  the  equity  to  the  property  held  by  the  trustees 
of  the  Standard  Oil  Trust,  transferable  only  on  the  books  of  said 
trustees  on  surrender  of  this  certificate.  This  certificate  is  issued 
upon  condition  that  the  holder  or  any  transferee  thereof  shall  be 
subject  to  all  the  provisions  of  the  agreement  creating  said  trust  and 
the  by-laws  adopted  in  pursuance  of  said  agreement  as  fully  as  if  lie 
had  signed  the  said  trust  agreement. 

Witness  the  hands  of  the  president,  secretary  and  treasurer  of  the 
board  of  trustees  this  day  of  A.  D.,  188  ,  at 

the  city  of  New  York. 

President 

Treasurer. 

Secretary. 


170  FORMS  RELATING  TO 

INTERBOROUGH-METROPOLITAN  COMPANY 

An  Agreement,  made  in  the  City  of  New  York  this  sixth  day  of 
February,  1911,  between  all  the  holders  of  voting  trust  certificates 
and  of  the  preferred  stock  of  Interborough-Metropolitan  Company 
who  shall  become  parties  to  this  agreement  by  signing  the  same, 
parties  of  the  first  part,  and  August  Belmont,  Edward  J.  Berwind, 
Andrew  Freedman,  Theodore  P.  Shonts  and  Cornelius  Vanderbilt 
(hereinafter  called  the  Voting  Trustees)  parties  of  the  second  part. 

Whereas,  the  Interborough-Metropolitan  Company  (hereinafter 
called  the  Company)  is  a  corporation  organized  under  the  laws  of  the 
State  of  New  York,  with  a  capital  stock  of  $155,000,000,  divided 
into  shares  of  SlOO  each,  of  which  $55,000,000  is  preferred  stock  and 
$100,000,000  is  common  stock,  and 

Whereas,  pursuant  to  an  agreement  dated  the  sixth  day  of  March, 
1906,  by  and  between  Edward  J.  Berwind  and  others,  a  Committee,  and 
August  Belmont  and  others,  as  Voting  Trustees,  the  Committee  caused 
to  be  transferred  to  the  Voting  Trustees  for  the  purpose  of  vesting  in 
the  Voting  Trustees  the  right  to  vote  thereon  for  the  term  and  upon  the 
terms  and  conditions  stated  in  said  agreement,  certain  shares  of  the 
stock  of  the  said  Company  which  said  agreement  also  provided  that 
every  other  stockholder  might  transfer  his  stock  in  the  Company  to  the 
Voting  Trustees  and  thereupon  participate  in  the  said  agreement,  and 

Whereas,  said  agreement  also  provided  that 

"If,  on  or  before  the  sixth  day  of  March,  1911,  the  Voting  Trustees 
shall  consider  a  continuance  of  the  same  management  and  control 
essential  to  the  welfare  of  the  Company,  and  shall  file  a  certificate 
to  that  effect  with  the  agent  of  the  Voting  Trustees,  the  holders  of 
voting  trust  certificates  issued  hereunder  agree  to  use  their  best  ef- 
forts to  effect  a  renewal  of  this  agreement  for  such  period,  not  ex- 
ceeding five  years  from  said  sixth  day  of  March,  1911,  as  the  Voting 
Trustees  may  designate;  and,  in  the  event  of  such  renewal,  certif- 
icates of  stock  in  the  Company  shall  be  deliverable  only  at  the 
expiration  of  the  period  of  such  renewal." 


VOTING  TRUSTS  171 

And  Whereas,  The  Voting  Trustees  have  filed  their  certificate 
therein  provided,  and  have  designated  for  the  renewal  of  the  voting 
trust  the  period  of  five  years  from  and  after  the  sixth  day  of  March, 
1911,  and  have  requested  the  holders  of  voting  trust  certificates  to 
use  their  best  efforts  to  effect  such  renewal, 

And  Whereas,  the  parties  of  the  first  part  deem  it  to  their  inter- 
est to  act  together,  concerning  the  management  of  Interborough- 
Metropolitan  Company  of  which  they  are  respectively  stockholders 
and  holders  of  said  voting  trust  certificates  and  to  that  end  to  unite 
the  voting  power  held  by  them  as  such  stockholders  and  to  place 
the  same  in  the  hands  of  the  voting  trustees  for  the  further  period 
of  five  years  as  hereinafter  provided, 

Now  Therefore,  this  agreement  made  in  consideration  of  the 
premises,  of  the  mutual  covenants  herein  contained  and  of  one 
dollar  by  each  of  the  parties  to  the  others  in  hand  paid,  Witnesseth 
as  follows: 

First. — Each  party  hereto  of  the  first  part,  holding  Voting  Trust 
Certificates  of  Interborough-Metropolitan  Company  heretofore  is- 
sued by  the  Voting  Trustees  or  shares  of  Preferred  Stock,  to  the 
number  set  opposite  his,  her  or  its  name  as  hereunto  subscribed  re- 
spectively, hereby  severally  agrees  with  the  parties  of  the  second 
part,  the  said  Voting  Trustees,  that  for  the  period  of  five  years  from 
and  after  March  6,  1911,  the  said  Voting  Trust  shall  continue  in 
full  force  and  effect  and  subject  to  the  same  terms  and  conditions 
as  provided  in  the  original  agreement  creating  said  Voting  Trust, 
dated  March  6,  1911,  and  during  the  said  period,  unless  sooner 
terminated  as  therein  provided,  the  said  Voting  Trustees  shall  retain 
possession  of  the  certificates  for  the  shares  of  the  stock  heretofore 
issued  to  the  Voting  Trustees,  and  represented  by  the  Voting  Trust 
certificates  held  by  the  parties  of  the  first  part  together  with  the 
shares  of  Preferred  Stock  delivered  by  the  parties  of  the  first  part 
to  the  Voting  Trustees. 


172  FORMS  RELATING  TO 

Second. — Every  other  stockholder  may  transfer  his  stock  either 
common  or  preferred  in  the  Company  to  the  Voting  Trustees  and 
thereupon  may  participate  in  the  terms,  conditions  and  privileges 
hereof,  and  the  Voting  Trustees,  in  respect  of  all  shares  of  stock  so 
transferred  to  them,  will  issue  and  deliver  certificates  similar  to  those 
hereinafter  mentioned,  entitling  the  holders  thereof  to  the  rights 
therein  specified. 

Third. — The  Voting  Trustees  agree  with  each  and  every  holder  of 
voting  trust  certificates  issued  as  hereinafter  provided,  that,  from 
time  to  time,  upon  request,  they  will  cause  to  be  issued,  in  respect 
of  stock  of  the  Company  received  by  them,  certificates  in  substan- 
tially the  following  form: 

(Form  of  Common  Stock  Voting  Trust  Certificate) 

INTERBOROUGH-METROPOLITAN  COMPANY 

No.  Shares. 

Common  Stock  Voting  Trust  Certificate 

This  Certifies,  that,  on  March  6,  1916, 
will  be  entitled  to  receive  a  certificate  or  certificates,  expressed  to 
be  fully  paid,  for  shares  of  one  hundred  dollars  each, 

in  the  common  stock  of  the  Interborough-Metropolitan  Company, 
and,  in  the  meantime,  to  receive  paj'^ments  equal  to  the  dividends, 
if  any,  collected  by  the  imdersigned  Voting  Trustees  upon  a  like 
number  of  such  shares  standing  in  their  names.  Until  the  actual 
delivery  of  such  stock  certificates,  the  Voting  Trustees  shall  possess, 
in  respect  of  any  and  all  of  such  stock,  and  shall  be  entitled,  in  their 
discretion,  to  exercise,  all  rights  and  powers  of  absolute  owners  of 
said  stock,  including  the  right  to  vote  for  every  purpose  and  to 
consent  to  any  corporate  act  of  said  Company  except  as  expressly 
limited  in  the  agreement  in  pursuance  of  which  this  certificate  is  is- 
sued; it  being  expressly  stipulated  that  no  voting  right  passes  by  or  un- 
der this  certificate,  or  by  or  under  any  agreement  expressed  or  implied. 

This  certificate  is  issued  pursuant  to,  and  the  rights  of  the  holder 


VOTING  TRUSTS  173 

are  subject  to,  and  limited  by,  the  terms  and  conditions  of  a  cer- 
tain agreement  dated  the  sixth  day  of  February,  1911,  between 
certain  holders  of  voting  trust  certificates  and  of  the  preferred  stock 
and  the  undersigned  voting  trustees,  filed  with  said  Company. 

No  stock  certificate  shall  be  due  or  deliverable  hereunder  before 
the  sixth  day  of  March,  1916,  but  the  Voting  Trustees  may  in  their 
uncontrolled  discretion  make  earlier  delivery  thereof. 

This  certificate  is  transferable  only  on  the  books  of  the  Voting 
Trustees  by  the  registered  holder  hereof,  either  in  person  or  by 
attorney  duly  authorized,  according  to  rules  established  for  that 
purpose  by  the  Voting  Trustees,  and  on  surrender  hereof;  until  so 
transferred,  the  Voting  Trustees  may  treat  the  registered  holder  as 
owner  hereof  for  all  purposes  whatsoever;  but  they  shall  not  be  re- 
quired to  deliver  stock  certificates  hereunder  without  surrender  hereof. 
This  certificate  is  not  valid  unless  duly  signed  on  behalf  of  the 
undersigned  Voting  Trustees  by  August  Belmont  and  Company, 
their  agent,  and  also  registered  by  Guaranty  Trust  Company  of 
New  York,  as  Registrar. 

In  Witness  Whereof,  the  undersigned  Voting  Trustees  have  caused 
this  certificate  to  be  signed  by  August  Belmont  and  Company,  their 
duly  authorized  agent,  this  day  of  ,  one  thou- 

sand nine  hundred  and 

August  Belmont, 
Edward  J.  Berwind, 
Andrew  Freedman, 
Theodore  P.  Shonts, 
Cornelius  Vanderbilt, 

Voting  Trustees. 

by 

Their  Agent. 

Registered 

Guaranty  Trust  Company  of  New  York, 

Registrar. 

by 

AssH  Secretary. 


174  FORMS  RELATING  TO 

(Form  of  Preferred  Stock  Voting  Trust  Certificate.) 

INTERBOROUGH-METROPOLITAN  COMPANY 

No.  Shares. 

Preferred  Stock  Voting  Trust  Certificate 

This  Certifies,  that,  on  March  6,  1916, 
will  be  entitled  to  receive  a  certificate  or  certificates,  expressed  to 
be  fully  paid,  for  shares  of  one  hundred  dollars  each,  in 

the  preferred  stock  of  the  Interborough-Metropolitan  Company, 
and,  in  the  meantime,  to  receive  payments  equal  to  the  dividends, 
if  any,  collected  by  the  undersigned  Voting  Trustees  upon  a  like 
number  of  such  shares  standing  in  their  names.  Until  the  actual 
delivery  of  such  stock  certificates,  the  Voting  Trustees  shall  possess, 
in  respect  of  any  and  all  of  such  stock,  and  shall  be  entitled,  in 
their  discretion,  to  exercise,  all  rights  and  powers  of  absolute  owners 
of  said  stock,  including  the  right  to  vote  for  every  purpose  and  to 
consent  to  any  corporate  act  of  said  Company  except  as  expressly 
limited  in  the  agreement  in  pursuance  of  which  this  certificate  is  issued, 
it  being  expressly  stipulated  that  no  voting  right  passes  by  or  under 
this  certificate,  or  by  or  under  any  agreement  expressed  or  implied. 

This  certificate  is  issued  pursuant  to,  and  the  rights  of  the  holder 
are  subject  to  and  limited  by,  the  terms  and  conditions  of  a  certain 
agreement  dated  the  sixth  day  of  February,  1911,  between  certain 
holders  of  voting  trust  certificates  and  of  the  preferred  stock  and  the 
undersigned  voting  trustees,  filed  with  said  Company. 

No  stock  certificate  shall  be  due  or  deliverable  hereunder  before 
the  sixth  day  of  March,  1916,  but  the  Voting  Trustees  may,  in  their 
uncontrolled  discretion,  make  earlier  delivery  thereof. 

This  certificate  is  transferable  only  on  the  books  of  the  Voting 
Trustees  by  the  registered  holder  hereof,  either  in  person  or  by  at- 
torney duly  authorized,  according  to  rules  established  for  that  pur- 
pose by  the  Voting  Trustees,  and  on  surrender  hereof;  until  so  trans- 
ferred, the  Voting  Trustees  may  treat  the  registered  holder  as  owner 
hereof  for  all  purposes  whatsoever,  but  they  shall  not  be  required  to 
deliver  stock  certificates  hereunder  without  surrender  hereof. 


VOTING  TRUSTS 


175 


This  certificate  is  not  valid  unless  duly  signed  on  behalf  of  the 
undersigned  Voting  Trustees  by  August  Belmont  and  Company, 
their  agent,  and  also  registered  by  Guaranty  Trust  Company  of 
New  York,  as  Registrar. 

In  Witness  Whereof,  the  undersigned  Voting  Trustees  have  caused 
this  certificate  to  be  signed  by  August  Belmont  and  Company,  their 


dul}^  authorized  agent,  this 
sand  nine  hundred  and 


day  of 


one  thou- 


AuGusT  Belmont, 
Edward  J.  Berwind, 
Andrew  Freedman, 
Theodore  P.  Shonts, 
Cornelius  Vanderbilt, 
Voting  Trustees. 


by. 


Their  Agent. 


Registered 

Guaranty  Trust  Company  of  New  York, 

Registrar. 
by 

Ass't  Secretary. 

Fourth. — On  March  6,  1916,  or  whenever,  earlier,  the  Voting 
Trustees  shall  decide  in  their  uncontrolled  discretion  to  make  such 
delivery,  the  Voting  Trustees,  in  exchange  for,  and  upon  surrender 
of,  any  voting  trust  certificate  then  outstanding  will,  in  accordance 
with  the  terms  hereof,  deliver  proper  certificates  of  capital  stock  of 
the  Company,  and  may  require  the  holders  of  voting  trust  certifi- 
cates to  exchange  them  for  certificates  of  capital  stock  of  the  Com- 
pany to  the  amount  and  of  the  class  called  for  by  the  respective 
voting  trust  certificates  outstanding. 

Whenever  certificates  for  stock  shall  so  become  deliverable,  the 
Voting  Trustees  may  deposit  with  Guaranty  Trust  Company  of 
New  York  or  with  any  other  trust  company  having  an  office  in  the 
City  of  New  York,  certificates,  properly  endorsed  for  transfer  in 
blank,  of  stock  in  the  Company  to  the  amounts  of  the  respective 


176  FORMS  RELATING  TO 

classes  of  said  stock  called  for  by  the  voting  trust  certificates  out- 
standing, with  authority  in  writing  to  such  depositary  to  deliver  the 
same  in  exchange  for  voting  trust  certificates  when  and  as  sur- 
rendered for  exchange,  and  thereupon  all  further  liability  of  the 
Voting  Trustees  for  the  delivery  of  stock  certificates  in  exchange  for 
voting  trust  certificates  shall  cease. 

Fifth. — The  term  Company,  for  the  purpose  of  this  agreement  and 
for  all  rights  hereunder,  including  the  issue  and  dehvery  of  stock, 
shall  be  taken  to  mean  the  above  named  Interborough-Metropohtan 
Company,  or  any  corporation  or  corporations  successor  to  it. 

Sixth. — Any  Voting  Trustee  may,  at  any  time,  resign  by  delivering 
his  resignation,  in  writing,  to  the  other  Voting  Trustees,  to  take 
effect  ten  days  thereafter  or  on  its  earlier  acceptance  by  the  Voting 
Trustees.  Any  vacancy  among  the  Voting  Trustees  caused  by  the 
death,  resignation  or  inability  to  act  of  Andrew  Freedman  or  Cor- 
nelius Vanderbilt,  or  any  successor  appointed  to  either  of  them,  shall 
be  filled  by  August  Belmont  and  Company,  as  from  time  to  time 
constituted.  Any  vacancy  among  the  Voting  Trustees  caused  by  the 
death,  resignation  or  inability  to  act  of  Edward  J.  Berwind  or 
Theodore  P.  Shonts,  or  any  successor  appointed  to  either  of  them, 
shall  be  filled  by  Guaranty  Trust  Company  of  New  York.  Any 
vacancy  among  the  Voting  Trustees  caused  by  the  death,  resigna- 
tion or  inability  to  act  of  August  Belmont,  or  any  successor  appointed 
to  him,  shall  be  filled  as  follows:  Said  August  Belmont  shall,  within 
thirty  days  from  the  date  of  this  agreement,  lodge  with  Guaranty 
Trust  Company  of  New  York  an  instrument  in  writing  signed  by 
him,  designating  three  persons  for  that  purpose,  and  any  such 
vacancy  shall  be  filled,  in  the  order  of  their  designation  in  said  in- 
strument, by  the  persons  so  designated,  or,  in  the  case  of  the  death 
or  refusal  to  serve  of  all  said  persons,  or  of  the  death,  resignation 
or  inability  to  act  of  the  last  of  said  persons  accepting  such  trustee- 
ship, or  in  case  of  the  failure  of  said  August  Belmont  to  make  such 
designation,  such  vacancy  shall  be  filled  by  the  unanimous  vote  of 


VOTING  TRUSTS  177 

the  four  remaining  Voting  Trustees.  The  term  Voting  Trustees, 
as  used  herein  and  in  said  voting  trust  certificates,  shall  apply  to  the 
parties  of  the  second  part  and  their  successors  hereunder. 

Seventh. — The  Voting  Trustees  may  adopt  their  own  rules  of  pro- 
cedure. The  action  of  a  majority  of  the  Voting  Trustees  expressed 
from  tune  to  time  at  a  meeting  or  by  writing  with  or  without  a 
meeting,  shall,  except  as  otherwise  herein  stated,  constitute  the 
action  of  the  Voting  Trustees  and  have  the  same  effect  as  though 
assented  to  by  all.  Any  Voting  Trustee  may  vote  in  person  or  by 
proxy,  and  may  act  as  a  director  or  officer  of  the  Company. 

Eighth. — In  voting  the  stock  held  by  them,  the  Voting  Trustees 
will  exercise  their  best  judgment  from  time  to  time  to  secure  suitable 
directors,  to  the  end  that  the  affairs  of  the  Company  shall  be  prop- 
erly managed,  and  in  voting  and  in  acting  on  other  matters  which 
shall  come  before  them  as  stockholders  or  at  stockholders'  meetings, 
will  likewise  exercise  their  best  judgment,  but  they  assume  no  re- 
sponsibility in  respect  of  such  management  or  in  respect  of  any  ac- 
tion taken  by  them,  or  taken  in  pursuance  of  their  consent  thereto, 
as  such  stockholders,  or  in  pursuance  of  their  vote  so  cast,  and  no 
Voting  Trustee  shall  incur  any  responsibility  by  reason  of  any  error 
of  law  or  of  any  matter  or  thing  done  or  suffered  or  omitted  to  be 
done  under  this  agreement,  except  for  his  own  individual  wilful  mal- 
feasance. 

Ninth. — The  Voting  Trustees  shall  possess,  and  shall  be  entitled 
in  their  discretion  to  exercise,  until  the  actual  delivery  of  stock  cer- 
tificates in  exchange  for  voting  trust  certificates,  all  rights  and  powers 
of  absolute  owners  of  said  stock,  including  the  right  to  vote  for  any 
purpose,  and  to  consent  to  any  corporate  act  of  said  Company,  it 
being  expressly  stipulated  that  no  voting  right  passes  to  others  by 
or  under  the  voting  trust  certificates,  or  by  or  under  this  agreement, 
or  by  or  under  any  agreement,  express  or  implied;  the  Voting 
Trustees  will  not,  however,  during  the  continuance  of  this  agreement, 


178  FORMS  RELATING  TO 

vote  in  respect  of  the  shares  of  the  capital  stocic  of  the  Company 
held  by  them,  to  authorize  any  increase  or  diminution  in  the  amount 
of  either  class  of  stock  of  the  Company,  except  with  the  consent  in 
each  instance  of  the  holders  of  two-thirds  in  amount  of  the  voting 
trust  certificates  for  common  stock  present  in  person  or  by  proxy  and 
voting,  at  a  meeting  called  by  the  Voting  Trustees  for  that  purpose. 

Tenth. — All  notices  to  be  given  to  the  holders  of  voting  trust  cer- 
tificates hereunder,  shall  be  given  by  publication  in  two  daily  papers 
of  general  circulation  in  the  City  of  New  York  twice  in  each  week 
for  two  successive  weeks;  and  any  call  or  notice  whatsoever,  when 
published  by  the  Voting  Trustees  as  herein  provided,  shall  be  taken 
and  considered  as  though  personally  served  on  all  parties  hereto, 
including  the  holders  of  said  voting  trust  certificates,  as  of  the  date 
of  first  publication,  and  such  publication  shall  be  the  only  notice 
reqaired  to  be  given  under  any  provision  of  this  agreement. 

Eleventh. — If,  on  or  before  the  sixth  day  of  March,  1916,  the 
Voting  Trustees  shall  consider  a  continuance  of  the  same  manage- 
ment and  control  essential  to  the  welfare  of  the  Company,  and  shall 
file  a  certificate  to  that  effect  with  the  agent  of  the  Voting  Trustees, 
the  holders  of  voting  trust  certificates  issued  hereunder  agree  to  use 
their  best  efforts  to  effect  a  renewal  of  this  agreement  for  such 
period,  not  exceeding  five  years  from  said  sixth  day  of  March,  1916, 
as  the  Voting  Trustees  may  designate;  and,  in  the  event  of  such 
renewal,  certificates  of  stock  in  the  Company  shall  be  deliverable 
only  at  the  expiration  of  the  period  of  such  renewal. 

Twelfth. — This  agreement  may  be  simultaneously  executed  in 
several  counterparts,  each  of  which  so  executed  shall  be  deemed  to 
be  an  original  and  such  counterparts  shall  together  constitute  but 
one  and  the  same  instrument. 

In  Witness  Whereof,  the  several  parties  have  hereunto  set  their 
hands,  in  the  City  of  New  York,  the  day  and  year  first  hereinabove 
mentioned, 


VOTING  TRUSTS  179 

SOUTHERN  RAILWAY  COMPANY 

This  Agreement,  made  ia  the  City  of  New  York,  this  27th  day 
of  August,  1902,  by  and  between 

party  of  the  first  part;  and  J.  Pierpont  Morgan,  Charles 
Lanier  and  George  F.  Baker  (hereinafter  called  the  "Voting  Trus- 
tees"), parties  of  the  second  part; 

WITNESSETH  as  follows: 

Whereas,  the  party  of  the  first  part  is  the  holder  of  Stock  Trust 
Certificates  in  respect  of  fully  paid  shares  of  $100  each  of  the  cap- 
ital stock  of  the  Southern  Railway  Company  (a  corporation  of 
Virginia),  issued  by  the  Voting  Trustees  under  and  pursuant  to  the 
terms  of  a  certain  agreement  dated  October  15,  1894,  by  and  between 
the  Voting  Trustees,  parties  thereto  of  the  second  part,  and  C.  H. 
Coster,  George  Sherman  and  Anthony  J.  Thomas,  a  Committee, 
parties  thereto  of  the  first  part;  and 

Whereas,  The  party  of  the  first  part  and  other  holders  of  such 
Stock  Trust  Certificates  desire,  and  have  requested,  that  in  respect 
of  all  Stock  Trust  Certificates  stamped  as  assenting  hereto,  the  said 
Voting  Trustees  shall  continue,  for  the  extended  term  hereinafter 
mentioned,  to  hold  the  stock  represented  by  such  Stock  Trust  Cer- 
tificates, and  to  vote  thereon,  and  to  possess  and  to  exercise  all  of 
the  rights  and  powers  conferred  upon  and  reserved  to  the  Voting 
Trustees  under  the  said  former  agreement;  and 

Whereas,  The  Voting  Trustees  are  willing  to  accede  to  the  said 
request  and  desire  of  the  party  of  the  first  part,  and  of  all  other 
holders  of  such  Stock  Trust  Certificates,  who,  by  presenting  the 
same  to  be  stamped  as  hereinafter  provided,  shall  have  indicated 
their  like  desire; 

Now,  Therefore,  in  consideration  of  the  premises: 
First. — The  party  of  the  first  part  and  all  holders  of  Stock  Trust 
Certificates  issued  under  the  said  Agreement  of  October  15,   1894, 
which  shall  be  stamped  as  having  assented  to  and  accepted  the 


180  FORMS  RELATING  TO 

terms  of  this  Agreement,  hereby  do  agree  and  consent  that  in  respect 
of  all  stock  represented  by  any  Stock  Trust  Certificate  stamped  as 
assenting  hereto,  the  term  of  said  Agreement  of  October  15,  1894, 
and  the  operation  thereof,  and  the  rights  and  powers  of  the  Voting 
Trustees  thereunder,  shall  continue  until  October  15,  1907,  and 
thereafter  until  such  day  as  a  majority  in  amount  of  the  holders  of 
such  Stock  Trust  Certificates  stamped  as  assenting  to  this  Agreement, 
shall,  by  vote  on  the  date  of  any  annual  election  for  Directors  of  the 
Southern  Railway  Company,  fix  as  the  date  for  the  termination  of 
such  Agreement  and  of  the  rights  and  powers  of  the  Voting  Trustees 
thereunder;  without  prejudice,  however,  to  the  continuing  right  of 
the  Voting  Trustees  in  their  discretion  to  cause  to  be  made  earlier 
delivery  of  stock  certificates  in  exchange  for  Stock  Trust  Certificates 
by  them  theretofore  issued. 

Second. — Article  Second  of  the  said  Agreement  of  October  15, 
1894,  is  hereby  amended  so  that  the  first  three  lines  thereof  shall 
read  as  follows,  to  wit: 

Second. — Upon  such  date  after  October  15,  1907,  as  a  major- 
ity in  amount  of  the  holders  of  Stock  Trust  Certificates  assent- 
ing to  this  change,  shall  have  fixed  by  vote  on  the  date  of  any 
annual  election  for  Directors  of  the  Southern  Railway  Company 
held  after  October  15,  1907,  or  whenever  the  Voting  Trustees 
shall  decide  to  make  delivery, — &c.,  &c., 
and  as  so  amended  in  its  Second  Article,  the  said  Agreement  of 
October  15,   1894,  is  hereby  renewed,   ratified,   confirmed  and  ex- 
tended so  far  as  concerns  the  parties  hereto  and  any  and  all  holders 
of  Stock  Trust  Certificates  stamped  as  assenting  hereto. 

Third. — Every  Stock  Trust  Certificate  issued  under  said  Agree- 
ment, and  which  shall  be  stamped  as  next  hereinafter  provided  as 
having  assented  to  this  Extension  Agreement,  shall  entitle  the  holder 
thereof  to  all  the  benefits  of  this  Agreement,  and  shall  subject  him 


VOTING  TRUSTS  181 

to  all  the  limitations  hereof,  to  the  same  extent  and  in  the  same 
manner  as  though  he  were  a  party  by  name  to  this  Agreement  and 
to  the  said  Agreement  of  October  15,  1894,  amended,  modified  and 
extended  as  herein  provided. 

Such  stamping  shall  be  as  follows: 

"The  holder  of  this  Stock  Trust  Certificate  has  assented  to  and 
accepted,  and  hereby  assents  to  and  accepts,  the  provisions  of  a 
certain  Extension  Agreement  dated  August  27,  1902;  and  expressly 
agrees  that  until  such  date  after  October  15,  1907,  as  a  majority 
in  amount  of  the  holders  of  assenting  stock  trust  certificates  shall 
have  fixed  by  vote  on  the  date  of  any  annual  election  for  Directors 
of  the  Southern  Railway  Company  held  after  October  15,  1907,  no 
stock  certificate  shall  be  due  or  deliverable  hereunder." 

Fourth. — The  Voting  Trustees  have  accepted  the  extension  of  the 
term  of  the  Voting  Trust  as  above  provided ;  and  upon  the  considera- 
tion and  in  the  manner  stated  in  the  said  Agreement  of  October  15, 
1894,  they  will  exercise  their  best  judgment  in  the  continued  dis- 
charge of  the  powers  conferred  upon  them  by  this  Agreement. 

Fifth. — This  Agreement  may  be  simultaneously  executed  in  several 
counterparts,  each  of  which  when  so  executed  shall  be  deemed  to 
have  been  an  original,  and  such  counterparts  shall  together  con- 
stitute but  one  and  the  same  instrument,  and  the  same  shall  be 
binding  whenever  signed  by  the  party  of  the  first  part  and  any  two 
of  the  said  three  Voting  Trustees. 

In  Witness  Whereof,  The  parties  have  hereunto  set  their  hands 
and  seals,  the  day  and  year  first  above  mentioned. 

INTERBOROUGH-METROPOLITAN  COMPANY 

To  Holders  of  Intcrborough-Mctropolitan  Company  Voting  Trust 
Certificates  and  Preferred  Stock: 

Pursuant  to  the  terms  of  the  Voting  Trust  Agreement,  the  under- 


182  FORMS  RELATING  TO 

signed,  the  duly  appointed  successors  of  the  Voting  Trustees  named 
therein,  have  filed  with  their  agents  their  certificate  for  the  renewal  of 
the  Voting  Trust  for  a  further  period  of  five  years  after  March  6th,  1911, 
and  the  holders  of  Voting  Trust  Certificates  are  requested  to  execute 
an  agreement  for  such  renewal  containing  the  same  terms  and  condi- 
tions as  the  original  Voting  Trust.  Counterparts  of  such  agreement 
may  be  obtained  at  the  office  of  August  Belmont  and  Company,  23 
Nassau  Street,  New  York  City. 

Provision  is  made  in  the  Voting  Trust  Agreement  for  the  issuance  of 
Preferred  Stock  Voting  Trust  Certificates  in  exchange  for  shares 
of  the  preferred  stock  of  those  holders  who  may  desire  to  avail 
themselves  of  the  privilege  of  becoming  parties  to  the  Voting  Trust 
Agreement, 

For  the  convenience  of  holders  of  Voting  Trust  Certificates  and  of 
Preferred  Stock  there  has  been  mailed  a  power  of  attorney  authorizing 
Solomon  R.  Guggenheim,  Rafael  R.  Govin,  Edwin  Hawley,  Gerald  L. 
Hoyt  and  Morton  F.  Plant  to  execute  the  renewal  agreement  on  their 
behalf,  which  may  be  returned  to  Charles  B.  Ludlow,  Secretary  Voting 
Trustees,  23  Nassau  Street,  New  York. 

If  the  copies  of  the  power  of  attorney  are  not  received  through  the 
mails  they  may  be  obtained  upon  appUcation  to  the  Secretary  of  the 
Voting  Trustees. 

The  Trustees  will  be  prepared  to  deliver  temporary  Voting  Trust 
Certificates  in  exchange  for  outstanding  Voting  Trust  Certificates  of 
the  Common  Stock  on  and  after  Thursday,  February  23,  1911,  at  the 
office  of  the  Transfer  Agents,  August  Belmont  &  Co.,  No.  23  Nassau 
Street,  New  York. 

Dated  February  21,  1911. 

August  Belmont, 
Edward  J.  Berwind, 

ArjDREW   FrEEDMAN, 

Theodore  P.  Shonts, 
Cornelius  Vanderbilt, 
Voting  Trustees. 


VOTING  TRUSTS  183 

INTERNATIONAL  MERCANTILE  MARINE  COMPANY 

New  York,  June  3,  1907. 

To  the  Holders  of  Stock  Trust  Certificates  for  Preferred  and  Common 
Stock  of  the  International  Mercantile  Marine  Company: 

By  the  agreement  dated  October  28,  1902,  under  which  the  above- 
mentioned  stock  trust  certificates  were  issued,  it  was  provided,  among 
other  things,  that  said  agreement  would  terminate  on  October  1,  1907, 
and  that  thereupon  the  Voting  Trustees,  in  exchange  for  and  upon  sur- 
render of  any  stock  trust  certificates  then  outstanding  would  deliver 
certificates  of  stock  of  the  International  Mercantile  Marine  Company. 

Holders  of  large  amounts  of  the  preferred  and  common  stock  voting 
trust  certificates  believing  it  of  great  importance  to  the  stockholders 
that  the  policy  of  the  present  management  should  be  continued  until 
the  plans  now  under  way  for  improving  the  Company's  fleet  and  per- 
manently estabUshing  its  strength  are  completed,  have  urgently  re- 
quested the  undersigned  to  propose  an  extension  of  the  voting  trust 
for  a  further  period  of  five  years.  Although  the  undersigned  have  felt 
that  their  obligations  have  been  fulfilled,  and  that  they  are  entitled  to 
be  relieved  from  further  responsibihty,  they  have  felt  it  their  duty, 
in  view  of  the  urgency  of  the  request,  to  bring  the  matter  to  the  atten- 
tion of  the  present  holders  of  the  stock  trust  certificates  and  to  provide 
for  an  extension  of  the  voting  trust  if  a  sufficient  number  of  such  holders 
desire  them  to  do  so. 

Notice  is  therefore  given  that  if,  prior  to  September  1,  1907,  holders 
of  a  sufficient  number  of  the  present  voting  trust  certificates  shall  have 
signified  their  desire  that  the  voting  trust  be  extended  for  the  period  of 
five  years,  or,  say  until  October  1,  1912,  the  undersigned  will  consent 
thereto  and  will  arrange  so  to  extend  the  agreement  of  such  holders. 
In  that  case  due  notice  will  be  given  in  order  that  the  present  stock 
trust  certificates  may  be  presented  for  stamping  or  for  exchange  into 
new  extended  certificates  as  may  be  determined. 

Holders  of  stock  trust  certificates  who  desire  to  have  the  voting 
trust  extended  should  signify  such  desire  as  soon  as  possible  to  Messrs. 


184  FORMS  RELATING  TO 

J.  P.  Morgan  &  Co.,  23  Wall  Street,  New  York,  or  to  Messrs.  J.  S. 
Morgan  &  Co.,  22  Old  Broad  Street,  London,  on  the  enclosed  blank, 
stating  the  amount  of  certificates  held. 
Respectfully, 

J.  PiERPONT  Morgan, 

J.  Bruce  Ismay, 

W.  J.  PiRRiE,  Voting  Trustees. 

P.   A.    B.   WiDENER, 

Charles  Steele, 

Messrs.  J.  P.  Morgan  &  Co., 

23  Wall  Street,  New  York. 
Dear  Sirs: 

The  undersigned  holder  of  Voting  Trust  Certificates  for  Stock  of  the 

International  Mercantile  Marine  Co.,  requests  that  the  Voting  Trust 

Agreement  dated  October  28,  1902,  may  be  extended  for  five  years— 

i.  e.,  until  October  1,  1912,  and  agrees  to  present  Voting  Trust  Cer- 

shares  Preferred  a,     ,    -       j.        •  e 

tificates  for  .^ares  Common  ^*«^^  ^°^  ^*^^P^^^  ""'  ^°^ 

exchange  into  new  extended  certificates  as  may  be  determined  in 
accordance  with  the  circular  of  Voting  Trustees  dated  June  3,  1907. 

Dated  ,  1907. 

SOUTHERN  RAILWAY  COMPANY 

New  York,  August  27,  1902. 

To  the  Holders  of  Stock  Trust  Certificates  for  Preferred  and  Com- 
mon Stock  of  the  Southern  Railway  Company: 

By  the  Agreement  dated  October  15,  1894,  under  which  the  above 
mentioned  Stock  Certificates  were  issued,  it  was  provided,  among  other 
things,  that  on  the  first  day  of  July,  1899,  if  the  Southern  Railway  Com- 
pany should  then  have  paid  five  per  cent,  cash  dividend,  in  one  year,  on 
its  Preferred  Stock,  or,  if  not,  then  so  soon  as  such  dividend  should  be 
so  paid,  the  Voting  Trustees,  in  exchange  for  and  upon  surrender  of 


VOTING  TRUSTS  185 

Stock  Trust  Certificates  then  outstanding,  would  deliver  proper  cer- 
tificates for  stock  of  the  Southern  Railway  Company. 

On  April  15,  1902,  the  Company  paid  a  semi-annual  dividend  of  two 
and  one-half  per  cent,  upon  its  Preferred  Stock.  If  the  dividend  soon 
to  be  declared,  payable  in  October,  shall  be  at  the  same  rate,  one  of  the 
conditions  of  the  said  Voting  Trust  Agreement,  limiting  the  period 
thereof,  will  have  been  fulfilled  and  under  that  Agreement,  unless  it  be 
extended,  the  holders  of  both  Common  and  Preferred  Stock  Trust 
Certificates  will  be  entitled,  after  payment  of  such  dividend,  to  have 
certificates  for  stock  of  the  Southern  Railway  Company  delivered  to 
them  upon  surrender  of  their  respective  Stock  Trust  Certificates 
therefor.  The  certificates  for  actual  Preferred  and  Common  Stock  of 
the  Company  would  thus  be  issued  and  dealt  in  in  the  market,  making 
it  possible  for  the  control  of  the  Company  to  be  bought  and  sold  from 
day  to  day  and  rendering  its  policy  and  management  subject  to  sudden 
and  surprising  change. 

Holders  of  large  amounts  of  Preferred  and  Common  Stock  Voting 
Trust  Certificates,  recognizing  this  danger,  have  requested  the  under- 
signed to  propose  an  extension  of  the  Voting  Trust  Agreement  and  have 
suggested  that  pending  an  ascertainment  of  the  wishes  of  the  stock- 
holders on  the  subject,  the  Board  of  Directors  should  postpone  until  the 
September  meeting  their  determination  as  to  the  amount  of  the  October 
dividend,  for  it  might  well  be  that  while  a  dividend  at  a  certain  rate 
could  be  conservatively  paid  under  a  continuance  of  the  existing  ad- 
ministration, the  Board  might  foel  hesitation  in  declaring  so  large  a 
dividend  if  stability  in  the  control  and  management  of  the  Company 
should  be  endangered  by  the  termination  of  the  Voting  Trust.  Ac- 
cordingly the  Board  has  postponed  fixing  the  rate  of  the  dividend  in 
order  that  the  stockholders  may  have  an  opportunity  of  indicating  their 
wishes  regarding  the  continuance  of  the  Voting  Trust  so  that  the 
Board  may  have  the  entire  situation  before  them  in  reaching  their 
conclusion  as  to  the  rate  of  dividend  to  be  declared. 

The  events  of  the  past  eighteen  months  in  connection  with  railroad 
properties,  have  revealed  the  danger  to  which  corporate  properties  are 


186  FORMS  RELATING  TO 

exposed,  of  the  control  of  their  stock  being  bought  up  in  the  market  by 
purchasers  not  identified  with  the  property  or  permanently  interested 
in  its  development  and  improvement.  Therefore  we  do  not  hesitate  to 
state  that,  in  our  opinion,  it  is  decidedly  for  the  interests  of  the  stock- 
holders of  the  Southern  Railway  to  protect  their  property  by  an  exten- 
sion of  the  Voting  Trust  until  negotiations  now  pending  for  the  further 
development  and  strengthening  of  its  lines  shall  be  settled  beyond  any 
risk  of  being  overturned,  and  until  the  completion  of  other  negotiations 
now  pending  in  relation  to  transportation  interests  in  the  Southern 
States  which  have  an  important  bearing  upon  the  interests  of  the 
Southern  Railway  Company.  It  is  scarcely  necessary  for  us  to  state 
that  in  bringing  this  matter  to  the  attention  of  the  stockholders  we 
have  no  desire  to  ourselves  continue  the  responsibilities  of  the  last 
eight  years;  at  the  same  time  we  have  felt  that  under  the  circumstances 
it  was  our  duty  to  make  this  statement,  leaving  it  to  the  stockholders 
themselves,  however,  with  full  knowledge  of  all  the  circumstances,  to 
determine  what  shall  be  done. 

It  is  proposed  that  the  said  Voting  Trust  Agreement  of  October  15, 
1894,  be  extended  for  a  further  period  of  five  years,  or  until  October  15, 
1907,  and  thereafter  until  such  date  as  a  majority  in  amount  of  the 
holders  of  Stock  Trust  Certificates  assenting  to  such  extension  shall 
have  fixed  by  vote  on  the  date  of  any  annual  election  for  Directors  of 
the  Company  held  after  October  15, 1907. 

The  undersigned  have  accordingly  consented  to  extend  said  Agree- 
ment as  above  stated,  for  such  of  the  holders  of  Stock  Trust  Certificates 
as  shall  desire  such  extension  to  be  made,  and  shall  present  their  Stock 
Trust  Certificates  to  be  properly  stamped  therefor,  provided  at  least  a 
majority  of  such  certificates  shall  be  presented. 

Holders  of  Stock  Trust  Certificates  for  both  Preferred  and  Common 
Stock  of  the  Southern  Railway  Company  desiring  to  unite  in  such 
extension  are  requested  to  present  their  certificates  at  the  office  of 
Messrs.  J.  P.  Morgan  &  Co.,  No.  23  Wall  Street,  New  York  City,  on  or 
before  September  15,  1902,  to  be  appropriately  stamped  as  entitled  to 
the  benefits  thereof. 


VOTING  TRUSTS  187 

The  extension  will  become  operative  as  to  all  certificates  which  have 
been  stamped  as  soon  as  a  majority  in  amount  of  said  Stock  Trust 
Certificates  shall  assent  thereto  and  present  their  certificates  to  be 
stamped  as  aforesaid.  In  case  the  extension  shall  not  become  operative, 
certificates  that  have  been  stamped  may  be  presented  so  that  the 
stamp  may  be  cancelled  or  a  new  certificate  issued  at  the  option  of  the 
holder.  Certificates  not  stamped  will  not  be  entitled  to  the  benefits 
of  the  extended  Agreement. 

For  your  information,  the  results  accomplished  under  the  existing 
management  may  be  briefly  stated : 
On  October  15,  1894,  the  operated  mileage  of  your  Com- 
pany was 4,391.94  miles 

On  June  30,  1902 6,765.91      " 

An  increase  of 2,373.97      " 

During  the  same  period  768.22  miles  of  second  track,  spurs  and 
sidings  have  been  added. 
The  gross  earnings  for  the  fiscal  year  ending  June  30, 

1895,  were $17,114,791 .  69 

The  gross  earnings  for  the  fiscal  year  ending  June  30, 

1902,  were 37,712,249.16 

Being  an  increase  of $20,597,456.47 

or  over  120  per  cent. 
The  net  income  above  fixed  charges  for  the  same  period 

increased  from $     895,744.81 

To 3,600,897 .  47 

being  302  per  cent. 
During  the  same  period  large  sums  have  been  expended  and  charged 
against  Income,  for  the  improvement  of  the  property  and  equipment  in 
order  to  increase  the  operating  efficiency  without  adding  correspond- 
ingly to  the  capital  account. 
On  June  30,  1902,  there  was  standing  to  the  credit  of 

Profit  and  Loss $6,510,894.88 

being  the  amount  of  accumulated  net  income  to 
that  date  on  hand  in  cash  or  cash  assets. 


188  FORMS  RELATING  TO 

The  physical  condition  of  your  Company's  property  and  equipment 
has  been  greatly  improved  and  is  now  in  a  high  state  of  efficiency. 
J.  PiERPONT  Morgan,   1 
Charles  Lanier,  \  Voting  Trustees. 

Geo.  F.  Baker,  J 

Notice  :  Holders  of  Voting  Trust  Certificates  for  both  Preferred  and 
Common  Stock  of  the  Southern  Railway  Company  who  approve  the 
proposed  extension  of  the  Voting  Trust,  are  notified  that  in  accordance 
with  the  foregoing  circular,  their  certificates  must  be  presented  at  the 
oflSce  of  Messrs.  J.  P.  Morgan  &  Co.,  No.  23  Wall  Street,  New  York,  on 
or  before  September  15,  1902,  to  be  appropriately  stamped  as  assenting 
to  such  extension. 

SOUTHERN  RAILWAY  COMPANY 

New  York,  October  31,  1902. 

To  the  Holders  of  Stock  Trust  Certificates  for  Preferred  and  Common 
Stock  of  the  Southern  Railway  Company: 

Holders  of  Stock  Trust  Certificates  issued  by  or  in  behalf  of  the 
Voting  Trustees  under  the  Agreement  made  October  15,  1894,  by  and 
between  C.  H.  Coster,  George  Sherman  and  Anthony  J.  Thomas,  a 
Committee  under  a  certain  Plan  for  the  Reorganization  of  the  Rich- 
mond and  West  Point  Terminal  Railway  and  Warehouse  Company  and 
its  subordinate  companies,  parties  of  the  first  part,  and  J.  Pierpont 
Morgan,  Charles  Lanier  and  George  F.  Baker  (therein  called  the  "Vot- 
ing Trustees"),  parties  of  the  second  part,  are  hereby  notified  that 
upon  the  payment  of  the  dividend  of  two  and  one-half  per  cent.,  upon 
the  preferred  stock  of  the  Southern  Railway  Company,  payable  Octo- 
ber 31,  1902,  the  operation  of  the  said  Voting  Trust  Agreement  of 
October  15,  1894,  will  cease  and  determine,  except  as  to,  and  in  respect 
of,  all  stock  represented  by  any  Stock  Trust  Certificate  issued  under 
said  Agreement  which  shall  have  been  stamped  as  assenting  to  the 
extension  thereof  under  the  Extension  Agreement  of  August  27,  1902. 


VOTING  TRUSTS  189 

From  and  after  that  date,  namely,  October  31,  1902,  no  Stock  Trust 
Certificate  issued  under  said  agreement  of  October  15,  1894,  and  not 
stamped  as  extended  under  the  agreement  of  August  27,  1902,  will  be 
transferred  or  transferable;  and,  by  reason  of  the  termination  of  said 
Agreement  as  above  stated,  the  only  right  of  holders  of  such  non- 
extended  and  unstamped  certificates  will  be  upon  surrender  thereof  at 
the  office  of  the  Agents  for  the  Voting  Trustees,  Messrs.  J.  P.  Morgan  & 
Co.,  No.  23  Wall  Street,  in  the  City  of  New  York,  to  receive  a  certificate 
or  certificates  for  fully-paid  shares  of  $100  each  in  the  Capital  Stock  of 
the  Southern  Railway  Company,  of  the  class  and  for  the  amount  spec- 
ified in  such  unstamped  Stock  Trust  Certificate;  but  holders  desiring 
to  retain  their  Stock  Trust  Certificates  may  have  the  certificates 
stamped  as  above  and  will  then  be  entitled  to  retain  the  same. 

The  Extension  Agreement  of  August  27,  1902,  having  become  opera- 
tive by  the  stamping  thereunder  of  a  majority  of  said  Stock  Trust 
Certificates,  the  undersigned,  acting  under  the  authority  conferred 
upon  them  by  said  Extension  Agreement,  have  determined  that  said 
Extension  Agreement  shall  terminate  on  October  15,  1907,  and  that 
delivery  of  stock  certificates  in  exchange  for  said  stamped  Stock  Trust 
Certificates  shall  be  made  on  that  date,  without  prejudice,  however,  to 
the  right  of  the  Voting  Trustees  in  their  discretion  to  cause  delivery  to 
be  made  at  an  earlier  date. 

In  view  of  the  fact  that  a  majority  of  the  outstanding  Stock  Trust 
Certificates  have  already  been  stamped  as  assenting  to  the  Voting 
Trust  Extension,  the  Voting  Trustees  have  no  hesitation  in  stating  that 
they  believe  it  is  for  the  best  interests  of  the  Company  and  therefore  of 
the  holders  of  the  remaining  Stock  Trust  Certificates  that  the  same  be 
promptly  stamped  as  assenting  to  the  extension  of  the  Voting  Trust 
above  mentioned,  instead  of  being  surrendered. 

However,  holders  of  unstamped  Stock  Trust  Certificates  have  the 
option  of  adopting  whichever  course  they  prefer,  and  are  therefore  re- 
quested to  present  their  Stock  Trust  Certificates  at  the  office  of  J.  P. 
Morgan  &  Co.,  No.  23  Wall  Street,  New  York,  on  or  after  November  1, 
1902,  either,  to  be  stamped  as  assenting  to  the  extension  of  the  Voting 


190  FORMS  RELATING  TO 

Trust  above  mentioned,  or  to  be  surrendered  in  exchange  for  Southern 
Railway  Company  Stock  Certificates,  as  above  set  forth. 

All  unstamped  Stock  Trust  Certificates  surrendered  for  exchange 
must  be  properly  endorsed  in  blank  by  the  registered  holder  thereof. 
As  stated  above,  owing  to  the  termination  of  the  original  agreement  of 
October  15,  1894,  the  Voting  Trustees  have  no  power  to  issue  new 
unstamped  Stock  Trust  Certificates  and  therefore  the  transfer  books  for 
such  unstamped  Certificates  will  be  finally  closed  from  and  after 
November  1,  1902. 

J.  PiERPONT  Morgan,  ] 

Charles  Lanier,  [  Voting  Trustees. 

George  F.  Baker,        ] 

Referring  to  the  foregoing  notice,  the  transfer  books  for  unstamped 
Stock  Trust  Certificates  having  been  finally  closed,  the  undersigned,  as 
Agents  for  the  Voting  Trustees,  are  not  authorized  to  make  any  further 
transfer  of  such  unstamped  Stock  Trust  Certificates. 

Holders  of  such  unstamped  Stock  Trust  Certificates  may,  however, 
present  the  same  to  be  stamped  as  assenting  to  the  Extension  Agree- 
ment of  August  27,  1902,  and  they  vn\\  thereupon  be  again  transferable 
under  the  terms  of  that  Agreement.  Holders  not  desiring  to  unite  in 
such  Extension  Agreement  may  surrender  their  unstamped  Stock  Trust 
Certificates  and  receive  in  exchange  therefor  certificates  of  stock  of  the 
Southern  Railway  Company  as  stated  in  said  notice.  In  case  the 
amount  of  Southern  Railway  Company  stock  which  may  be  issued  on 
such  exchange  is  sufficient  to  warrant  an  application  to  list  the  same 
on  the  New  York  Stock  Exchange,  such  application  will  be  made  in  due 
course. 

J.  P.  Morgan  &  Co. 

New  York,  November  1,  1902. 

THE  CHESAPEAKE  AND  OHIO  RAILWAY  COMPANY 

To  the  Holders  of  Trust  Certificates  issued  by  the  undersigned  for 
Stock  of  The  Chesapeake  &  Ohio  Railway  Co. : 
The  period  of  the  "Voting  Trust"  will  expire  on  the  31st  instant. 


VOTING  TRUSTS  191 

After  that  date  we  shall  be  prepared  to  deliver  stock  certificates  in 
exchange  for  the  present  trust  certificates,  on  surrender  of  the  latter 
at  the  office  of  Messrs.  Drexel,  Morgan  &  Co.,  23  Wall  Street,  New 
York.  Certificates  must  be  assigned  to  the  "Trustees  for  exchange  for 
stock." 

J.  PiERPONT  Morgan,    | 

John  Crosby  Brown,    [  Trustees. 

George  Bliss,  J 


CHICAGO  GREAT  WESTERN  RAILROAD  COMPANY 

To  the  Holders  of  Stock  Trust  Certificates  issued  in  respect  of  Pre- 
ferred and  Common  Stock  of  the  Chicago  Great  Western  Rail- 
road Company,  pursuant  to  the  Voting  Trust  Agreement  dated 
September  1,  1909: 

You  are  hereby  notified  that  the  above  mentioned  Voting  Trust 
Agreement,  by  the  terms  thereof,  will  terminate  on  September  1, 
1914,  and  that  on  or  after  that  date  said  Stock  Trust  Certificates 
may  be  exchanged  for  corresponding  Certificates  of  Stock  of  said 
Railroad  Company.  Exchanges  will  be  made  in  the  City  of  New 
York,  at  the  temporary  offices  at  No.  21  Broad  Street  of  J.  P. 
Morgan  &  Co.,  who  will  act  as  Agents  for  the  \'oting  Trustees  in 
effecting  such  exchange.  Not  more  than  one  hundred  schedules  per 
diem  will  be  received.  Pending  the  preparation  of  the  proper  Stock 
Certificates,  suitable  receipts  will  be  issued  for  the  Stock  Trust 
Certificates  surrendered. 

George  F.  Baker, 
Robert  Fleming, 
Surviving  Voting  Trustees. 
New  York,  August  1,  1914. 

New  York,  August   1,    1914. 
To  the  Holders  of  Stock  Trust  Certificates  issued  in  Respect  of 
Preferred  and  Common  Stock  of  the  Chicago  Great  Western  Rail- 


192  FORMS  RELATING  TO 

road   Company,   pursuant   to   the   \^oting  Trust  Agreement   dated 
September  1,  1909,  which  by  its  terms  expires  September  1,  1914: 

On  and  after  September  1,  1914  at  our  temporary  office,  No.  21 
Broad  Street,  New  York,  we  will  receive  the  above  mentioned  Stock 
Trust  Certificates,  and  on  that  date  we  shall  be  prepared  to  begin 
the  delivery  of  Stock  Certificates  of  the  Chicago  Great  Western 
Railroad  Company,  in  exchange  for  said  Stock  Trust  Certificates 
duly  surrendered  for  exchange.  Pending  the  preparation  of  the 
Stock  Certificates,  suitable  temporary  receipts  will  be  issued. 

Not  more  than  one  hundred  schedules  per  diem  will  be  received. 

Holders  transmitting  Stock  Trust  Certificates  by  mail  will  please 
indicate  whether  they  wish  the  Stock  Certificates  sent  by  registered 
mail  or  by  express  at  their  expense. 

J.  P.  Morgan  &  Co., 
Agent  for  Voting  Trustees. 


INTERNATIONAL  HARVESTER  COMPANY 

Notice  of  Expiration  of  Voting  Trust 

Notice  is  hereby  given  that  the  Voting  Trust  Agreement,  dated 
August  13,  1902,  covering  common  and  preferred  stock  of  Interna- 
tional Harvester  Company  will  expire  on  August  1,  1912.  On  and 
after  that  date  First  Trust  and  Savings  Bank  of  Chicago  will  de- 
liver certificates  representing  common  and  preferred  stock,  as  the 
case  may  be,  in  exchange  for,  and  upon  surrender  of,  stock  trust 
certificates  duly  endorsed  for  transfer  in  blank  or  accompanied  by 
proper  instruments  of  transfer  in  blank. 

The  Standard  Trust  Company  of  New  York  City  has  consented 
to  act  without  charge  as  agents  for  the  depositors  and  will  receive  on 
and  after  August  1,  1912,  deposits  of  stock  trust  certificates  and  effect 
exchanges  for  account  of  the  depositors  through  First  Trust  and  Sav- 
ings Bank. 

Holders  of  Stock  Trust  Certificates  are  requested  to  present  their 


VOTING  TRUSTS  193 

certificates  for  exchange  to  First  Trust  and  Savings  Bank  of  Chicago 
as  soon  after  August  1,  1912,  as  possible. 

Both  the  preferred  and  common  stocks  of  International  Harvester 
Company  have  been  listed  on  the  New  York  Stock  Exchange,  the 
listing  to  become  effective  on  and  after  August  1,  1912. 

No  transfers  of  stock  trust  certificates  will  be  made  after  July  31, 
1912. 

George  W.  Perkins      ] 
Charles  Deering,  [  Voting  Trustees. 

Cyrus  H.  McCormick,  J 
July  20,  1912. 

KANSAS  CITY  SOUTHERN  RAILWAY  COMPANY 

To  the  Holders  of  Trust  Certificates  Issued  by  the  Voting  Trustees 
under  the  Voting  Trust  Agreement,  dated  Feb.  28,  1900,  between 
WiUiam  F.  Harrity  and  others  and  John  W.  Gates  and  others  for 
stock  of  the  Kansas  City  Southern  Railway  Company. 

Notice  is  hereby  given  that  the  Voting  Trust  Agreement  entered 
into  the  28th  day  of  February,  1900,  by  and  between  William  F. 
Harrity,  August  Hecksher,  Hermann  Sielcken,  William  Edenbom, 
Max  Pam,  Samuel  R.  Shipley,  Silas  W.  Pettit  and  Winthrop  Smith, 
as  a  Reorganization  Committee  under  a  plan  and  agreement  for  the 
Reorganization  of  the  Kansas  City,  Pittsburg  &  Gulf  Railroad  Com- 
pany and  its  terminal  Companies,  party  of  the  first  part,  and  John 
W.  Gates,  James  Stillman,  John  Lambert,  Louis  Fitzgerald,  Her- 
mann Sielcken,  William  Edenbom,  and  Samuel  R.  Shipley,  parties 
of  the  second  part,  will  expire  by  its  owti  terms  on  the  2nd  day  of 
April,  1905,  and  that  the  undersigned,  who  are  now  the  Voting 
Trustees  appointed  and  acting  pursuant  to  the  provisions  of  said 
Voting  Trust  Agreement,  will,  beginning  on  the  third  day  of  April, 
1905,  in  accordance  with  the  terms  of  said  Voting  Trust  Agreement 
and  in  exchange  for  and  upon  surrender  of  any  stock  trust  certifi- 
cates duly  issued  by  or  for  the  Voting  Trustees  in  accordance  with 
the  provisions  of  said  Voting  Trust  Agreement  and  then  outstand- 


194  FORMS  RELATING  TO 

ing,  make  delivery  of  corresponding  certificates  for  the  capital  stock 
of  the  Kansas  City  Southern  Railway  Company  of  the  class  specified 
in  said  stock  trust  certificates  respectively. 

All  holders  of  stock  trust  certificates  issued  imder  said  Voting 
Trust  Agreement  and  then  outstanding  are  hereby  required  to  ex- 
change the  same  for  certificates  for  the  capital  stock  of  the  Kansas 
City  Southern  Railway  Company  in  accordance  with  their  terms 
beginning  on  the  3rd  day  of  April,  1905,  but  only  one  hundred 
schedules  per  diem  will  be  received. 

Such  Stock  Trust  Certificates  must  be  presented  for  effecting  such 
exchange  to  the  Mercantile  Trust  Company,  the  Agent  of  the  Voting 
Trustees  for  the  issuance  of  such  certificates,  at  its  office.  No.  120 
Broadway,  in  the  City,  County  and  State  of  New  York. 

All  stock  trust  certificates  surrendered  for  exchange  must  be 
properly  assigned  in  blank  or  to  the  undersigned  Voting  Trustees. 

In  Witness  Whereof,  we  have  hereunto  subscribed  our  names  this 
16th  day  of  March,  1905. 

Edward  H.  Harriman, 
Otto  H.  Kahn, 
Louis  Fitzgerald, 
James  Stillman, 
John  W.  Gates, 
George  J.  Gould, 
Hermann  Sielcken. 

THE  METROPOLITAN  WEST  SIDE  ELEVATED  RAILWAY 

COMPANY 

1001  Royal  Insurance  Building,  Chicago,  III. 

Notice  is  hereby  given  to  all  owners  and  holders  of  Voting  Trust 
Certificates  of  the  Central  Trust  Company  of  New  York,  represent- 
ing an  undivided  interest  in  74,987  shares  of  the  Coinmon  Capital 
Stock  of  The  Metropolitan  West  Side  Elevated  Railway  Company, 
that  the  Voting  Trust  Agreement,  under  which  the  said  Voting  Trust 
Certificates  were  issued,  will  expire  by  limitation  on  February  1st, 


VOTING  TRUSTS  195 

1904.  On  and  after  that  date  Certificates  of  The  MetropoUtan 
West  Side  Elevated  Railway  Company  will  be  issued  to  the  holders 
of  said  Voting  Trust  Certificates  upon  their  assignment  and  sur- 
render to  the  Central  Trust  Company,  54  Wall  Street,  New  York 
City.  Holders  so  surrendering  Voting  Trust  Certificates  will  please 
give  their  addresses  in  full  and  designate  whether  they  wish  New 
York  or  Chicago  Certificates. 

George  Higginson,  Jr., 
Secretary. 
January  25th,  1904. 


TOLEDO,  ST.  LOUIS  AND  WESTERN  RAILROAD  COMPANY 

The  agreement  bearing  date  August  1,  1900,  between  the  Reor- 
ganization Committee  of  the  Toledo,  St.  Louis  and  Kansas  City 
Railroad  Company  and  the  undersigned  as  Voting  Trustees  provided 
that  the  preferred  and  common  stock  certificates  of  the  Toledo, 
St.  Louis  and  Western  Railroad  Company  held  thereunder  should 
be  distributed  on  July  1,  1905.  Accordingly,  notice  is  hereby  given 
that  upon  surrender  to  the  Central  Trust  Company  of  New  York 
at  its  office,  54  Wall  Street,  New  York  City,  on  or  after  July  1,  1905, 
in  negotiable  form,  of  its  outstanding  trust  certificates  representing 
said  preferred  and  common  stock,  said  Trust  Company  will  be  pre- 
pared to  deliver  the  certificates  for  preferred  and  common  stock  of 
the  Toledo,  St.  Louis  and  Western  Railroad  Company  to  which  the 
holders  of  said  trust  certificates  are  respectively  entitled. 
Dated,  New  York,  May  2,  1905. 

F.  P.  Olcott, 
Thos.  H.  Hubbard, 
Wm.  a.  Read, 

Voting  Trustees. 

Referring  to  the  foregoing,  notice  is  hereby  given  that  an  applica- 
tion will  be  made  to  list  upon  the  New  York  Stock  Exchange  the 
certificates  representing  the  preferred   and   common   stock  of  this 


196  FORMS  RELATING  TO 

company  so  that  the  same  may  be  there  dealt  in  as  soon  as  may  be 
after  June  30,  1905. 

Toledo,  St.  Louis  and  Western  Railroad  Co., 

by  Thos.  H.  Hubbard, 
Vice-President. 


ERIE  RAILROAD  COMPANY 

New  York,  February  20,  1904. 

To  the  Holders  of  Stock  Trust  Certificates  for  First  Preferred  Stock, 
Second  Preferred  Stock  and  Common  Stock  of  the  Erie  Rail- 
road Company: 

By  the  agreement  dated  January  1,  1896,  under  which  the  above- 
mentioned  Stock  Trust  Certificates  were  issued,  it  was  provided, 
among  other  things,  that  on  the  first  day  of  December,  1900,  if  the 
Erie  Railroad  Company  should  then  have  paid  four  per  cent,  cash 
dividend  in  one  year  on  its  First  Preferred  Stock,  and  if  not,  then 
so  soon  as  such  dividend  should  be  paid,  the  Voting  Trustees,  in 
exchange  for,  and  upon  surrender  of  Stock  Trust  Certificates  then 
outstanding,  would  deliver  proper  certificates  of  stock  of  the  Erie 
Railroad  Company. 

On  January  19,  1904,  the  Board  of  Directors  declared  a  semi- 
annual dividend  of  two  per  cent,  upon  the  First  Preferred  Stock 
payable  February  29,  1904.  The  payment  of  this  dividend,  being 
the  second  dividend  of  two  per  cent,  paid  during  the  year,  fulfills 
the  condition  limiting  the  period  of  the  Voting  Trust  as  above  set 
forth,  and  it  therefore  becomes  the  duty  of  the  Voting  Trustees  to 
arrange  for  the  delivery  of  stock  of  the  Erie  Railroad  Company  in 
exchange  for  the  Stock  Trust  Certificates  now  outstanding. 

In  view  of  the  present  situation  the  holders  of  important  interests 
in  the  property  have  strongly  urged  us  to  arrange  for  an  extension 
of  the  Voting  Trust  for  a  further  period  of  five  years,  during  which 


VOTING  TRUSTS  197 

it  is  hoped  that  most  of  the  important  developments  of  the  property 
which  are  now  in  contemplation  can  be  completed. 

Inasmuch  as  the  earnings  of  the  property  have  now  reached  a 
point  where  the  dividend,  upon  which  the  continuation  of  the  Voting 
Trust  was  limited,  could  be  safely  paid,  we  have  felt  that  our  ob- 
ligation had  been  fulfilled  and  that  we  were  entitled  to  be  relieved 
from  further  responsibility.  Considering,  however,  the  urgency  of 
the  request,  we  have  deemed  it  our  duty  to  bring  the  matter  to  the 
attention  of  the  present  holders  of  the  Stock  Trust  Certificates. 

We  therefore  give  notice  that  on  and  after  the  first  day  of  May, 
1904,  the  Voting  Trust  terminates  and  we  shall  cease  to  transfer 
the  present  Voting  Trust  Certificates. 

We  also  give  notice  that,  if  before  that  date,  holders  of  a  sufficient 
amount  of  the  present  Voting  Trust  Certificates  shall  have  signified 
their  desire  that  the  Voting  Trust  be  extended  for  the  period  of  five 
years,  say  until  May  1,  1909,  we  will  consent  to  such  extension,  and 
will  arrange  so  to  extend  the  agreement  for  such  holders.  Due 
notice  will  be  given  in  order  that  the  present  Stock  Trust  Certificates 
may  be  presented  for  stamping  or  for  exchange  into  new  extended 
certificates,  as  may  be  determined. 

Holders  of  Stock  Trust  Certificates  who  desire  to  have  the  Voting 
Trust  extended  should  signify  such  desire  to  J.  P.  Morgan  &  Co., 
23  Wall  St.,  New  York,  at  once,  stating  numbers  and  amounts  of 
certificates  held. 

Holders  not  desiring  to  unite  in  extending  the  Voting  Trust  will 
upon  surrender  of  their  Voting  Trust  Certificates  be  entitled  to 
receive  in  exchange  certificates  for  stock  of  the  Erie  Railroad  Com- 
pany, as  soon  as  the  same  are  prepared,  of  which  due  notice  will 
be  given. 

J,  PiERPONT  Morgan, 
Louis  Fitzgerald, 
C.  Tennant, 

Voting  Trustees. 


198  FORMS  RELATING  TO 

READING  COMPANY 

New  York,  October  31st,  1904. 
To  the  Holders  of  Voting  Trustees'  Certificates  for  First  Preferred 
Stocli,  Second  Preferred  Stock  and  Common  Stock  of  Reading 
Company: 

By  the  agreement  dated  February  1,  1897,  under  which  the  above- 
mentioned  Voting  Trustees'  Certificates  were  issued,  it  was  provided, 
among  other  things,  that: 

"On  the  first  day  of  January,  1902,  if  then  the  Reading  Company 
for  two  consecutive  years  shall  have  paid  four  per  cent,  per  annum 
cash  dividend,  on  its  First  Preferred  Stock,  and,  if  not,  then  so 
soon  as  such  dividend  shall  be  paid,  and  upon  surrender  of  any 
stock  trust  certificate  then  outstanding,  the  Voting  Trustees  will, 
in  accordance  with  the  terms  thereof  deliver  therefor  corresponding 
proper  certificates  of  stock  of  the  Reading  Company." 

On  June  15,  1904,  the  Board  of  Directors  of  Reading  Company 
declared  a  dividend  of  two  per  cent,  upon  the  First  Preferred  Stock, 
payable  September  9,  1904.  The  payment  of  this  dividend,  being  the 
second  dividend  of  two  per  cent,  paid  during  the  year  1904,  two 
dividends  of  two  per  cent,  each  having  previously  been  paid  during  the 
year  1903,  fulfills  the  condition  limiting  the  period  of  the  Voting  Trust 
as  above  set  forth,  and  it,  therefore,  becomes  the  duty  of  the  Voting 
Trustees  to  arrange  for  the  delivery  of  stock  of  Reading  Company  in 
exchange  for  the  Voting  Trustees'  Certificates  now  outstanding. 

We  give  notice  that,  on  and  after  December  1,  1904,  we  shall 
cease  to  issue  Voting  Trustees'  Certificates,  and  we  have  arranged 
for  the  delivery  of  stock  of  Reading  Company  in  exchange  for  such 
certificates  which  may  then  be  outstanding. 

On  and  after  December  1,  1904,  holders  of  the  present  Voting 
Trustees'  certificates  bearing  the  registration  of  the  Central  Trust 
Company  of  New  York  are  requested  to  present  their  certificates  at 
the  office  of  Messrs.  J.  P.  Morgan  &  Company,  Transfer  Agents  of 
the  Voting  Trustees  in  New  York,  and  certificates  bearing  the  regis- 


VOTING  TRUSTS  199 

tration  of  the  Pennsylvania  Company  for  Insurance  on  Lives  and 
Granting  Annuities,  Philadelphia,  to  Messrs.  Drexel  &  Company, 
Transfer  Agents  of  the  Voting  Trustees  in  Philadelphia,  who  will  be 
prepared  to  deliver  certificates  of  stock  of  Reading  Company  in 
exchange  for  the  same. 

One  hundred  schedules  per  diem  will  be  received  at  each  Transfer 
Office. 

No  transfers  of  Voting  Trustees'  Certificates  will  be  made  after 
November  30th,  1904.  All  certificates  surrendered  must  be  properly 
endorsed  in  blank  by  the  registered  holder  thereof. 

Holders  transmitting  certificates  by  mail  will  please  indicate  the 
name  in  which  Stock  Certificates  are  to  be  issued,  and  whether  they  wish 
such  certificates  sent  by  registered  mail  or  by  express  at  their  expense. 

In  surrendering  their  Trust  to  the  stockholders,  the  Voting  Trus- 
tees desire  to  call  attention  to  the  results  obtained  during  their 
administration  thereof; 

For  the  fiscal  year  ended  June  30,  1897,  the  total 

gross  receipts  of  the  three  Companies  were $45,557,889.77 

For  the  fiscal  year  ended  June  30,   1904,  the  total 

gross  receipts  of  the  three  Companies  were 77,040,255.27 

Making  an  increase  of $31,482,365.50 

equivalent  to  sixty-nine  per  cent. 

For  the  fiscal  year  ended  June  30,  1897,  there  was  a 
deficiency  in  net  earnings  of  the  three  Companies 
of $579,134.38 

For  the  fiscal  year  ended  June  30,  1904,  the  net  earn- 
ings of  the  three  Companies  were 7,757,538.07 

Making  an  increase  of $8,336,672.45 

On  the  1st  of  December,  1896,  the  annual  fixed 
•    charges  and  taxes  of  the  Reading  System  were  _  $10,350,046.00 

On  the  30th  of  June,  1904,  the  annual  fixed  charges 

and  taxes  of  the  Reading  System  were 10,863,094.00 

Showing  an  increase  of $513,048.00 


200  FORMS  RELATING  TO 

which  includes  interest  upon  all  obligations  issued  since  the  reor- 
ganization, on  the  improvement  and  betterment  of  the  property; 
$166,412  rental  of  the  Wilmington  and  Northern  Railroad  and  the 
Reading  Belt  Railroad,  and  $920,000  interest  upon  the  bonds  issued 
in  1901  to  pay  for  the  majority  of  the  capital  stock  of  the  Central 
Railroad  Company  of  New  Jersey.  The  increase  in  taxes,  which  is 
included  in  the  fixed  charges,  amounts  to  $506,169. 

If  the  fixed  charges  created  since  December  1,  1896,  on  account  of 
the  acquisition  of  additional  properties,  and  interest  upon  the  addi- 
tional General  Mortgage  bonds  issued  for  the  purchase  of  equipment, 
are  eliminated,  the  fixed  charges  of  the  Reading  System  were 
$1,018,065  less  for  the  fiscal  year  ended  June  30,  1904,  than  they 
were  for  the  fiscal  year  ended  November  30,  1896. 

The  Railway  Company  has  expended,  for  improve- 
ments and  betterments  during  this  period $8,582,421.00 

These  expenditures  have  increased  the  track 
mileage  230.33  miles,  whilst  the  total  increase  of 
track  mileage  during  this  year  was  369.61  miles. 

The  value  of  the   rolling  equipment  has  increased 

from 16,990,856.19 

as  of  December  1,  1896. 

To 31,027,728.00 

as  of  June  30,  1904. 

The   floating   equipment   has   increased,   during  the 

same  period,  from 1,439,850.00 

To 3,224,108.16 

The  Railway  Company  has  accumulated  an  insurance 

capital  fund  of 1,000,000.00 

invested  in  interest-bearing  securities. 

General  Mortgage  Bonds  have  been  purchased  and 

canceled  for  the  sinking  fund,  amounting  to  —      2,016,000.00 

There  has  been  paid,  on  account  of  an  old  unadjusted 
claim  of  the  city  for  damages  at  Columbia 
Avenue  and  other  points  in  Philadelphia    560,648.41 


VOTING  TRUSTS  201 

And  there  has  been  set  aside  to  provide  for  the 
maturing  obligations  issued  by  the  City  of 
Philadelphia  to  pay  for  construction  of  the 
Pennsylvania  Avenue  subway 494,063.86 

The  Philadelphia  and  Reading  Coal  and  Iron  Com- 
pany has  spent   5,870,505.00 

for  new  work  at  collieries. 

And  has  also  paid  off  its  Coal  Trust  Certificates, 

amounting  to 3,600,000.00 

The  Reading  Iron  Company  has,  out  of  its  earnings  rebuilt  its 
entire  plant,  and  it  has  also  acquired  a  large  interest  in  the  Phila- 
delphia Steel  Company;  and  it  is  now  one  of  the  best-equipped  and 
most  successful  industrial  companies  in  the  country. 

In  additional  to  this  general  favorable  statement  of  financial 
management,  the  stockholders  are  to  be  particularly  congratulated 
on  the  acquisition  of  the  control  of  the  Central  Railroad  of  New 
Jersey.  In  1901  a  majority  of  the  capital  stock  of  that  Company 
was  purchased.  The  dividends  received  from  the  Central  Railroad 
of  New  Jersey  on  the  stock  purchased  have  exceeded  the  annual 
charge  to  Reading  Company  accruing  on  this  transaction,  so  that 
the  purchase  has  been  profitable  in  itself;  but  of  far  more  importance 
is  the  general  advantage  of  Reading  Company  arising  from  the  ac- 
quisition of  this  stock,  an  advantage  which  cannot  be  overestimated. 
It  was  essential  to  the  future  welfare  of  the  Reading  Company  that 
it  secure  and  control  this  only  available  outlet  to  the  port  of  New 
York. 

J.  PiERPONT  Morgan, 
Frederic  P.  Olcott, 
C.  S.  W.  Packard, 

Voting  Trustees. 

ST.   LOUIS  AND   SAN   FRANCISCO  RAILROAD   COMPANY 

To  Holders  of  Trust  Certificates  for  First  Preferred  Stock,  Second 
Preferred  Stock  and  Common  Stock  of  the  St.  Louis  &  San  Francisco 


202  FORMS  RELATING  TO 

Railroad  Company  issued  under  the  Voting  Trust  Agreement  dated 
the  1st  day  of  July,  1896,  between  Louis  Fitzgerald,  J.  Kennedy  Tod, 
Isaac  N.  Seligman,  Siegmund  Alsberg,  James  A.  Blair,  Benjamin  P. 
Cheney,  Samuel  C.  Eastman  and  Charles  S.  Gleed,  a  Committee  under 
a  certain  Plan  and  Agreement  for  the  reorganization  of  the  St.  Louis  & 
San  Francisco  Railway  Co.,  dated  the  1st  day  of  April,  1896,  parties  of 
the  first  part,  and  John  A.  Stewart,  Louis  Fitzgerald,  J.  Kennedy  Tod, 
Isaac  N.  Seligman,  Samuel  C.  Eastman,  Benjamin  P.  Cheney  and 
James  A.  Blair,  Voting  Trustees,  parties  of  the  second  part: 

Notice  is  hereby  given  that,  on  the  1st  day  of  July,  1901,  the  St.  Louis 
&  San  Francisco  Railroad  Co.,  having  then  paid  for  two  consecutive 
years  a  four  per  cent,  cash  dividend  on  its  preferred  stock,  the  under- 
signed Voting  Trustees  will,  in  accordance  with  the  terms  of  said  Voting 
Trust  Agreement,  in  exchange  for  and  upon  surrender  of  any  stock 
trust  certificates,  then  outstanding,  make  delivery  of  proper  certificates 
for  the  capital  stock  of  the  St.  Louis  &  San  Francisco  Railroad  Co. 

All  holders  of  Stock  Trust  Certificates,  issued  under  said  Voting 
Trust  Agreement,  are  hereby  required  to  exchange  them  for  certificates 
of  capital  stock  on  said  1st  day  of  July,  1901. 

Stock  trust  certificates  must  be  presented  for  exchange  to  Continen- 
tal Trust  Company  of  the  City  of  New  York,  the  agent  of  the  Voting 
Trustees  for  such  purpose,  at  its  oflfice.  No.  30  Broad  Street,  in  the  City 
of  New  York. 

Dated,  New  York,  June  18,  1901. 

John  A.  Stewart, 
Louis  Fitzgerald, 
J.  Kennedy  Tod, 
Isaac  N.  Seligman, 
Samuel  C.  Eastman, 
Benjamin  P.  Cheney, 
James  A.  Blair, 

Voting  Trustees. 

New  York,  June  18,  1901. 
Referring  to  the  foregoing  notice  the  exchange  of  stock  trust  cer- 
tificates for  stock  certificates  may  be  made  at  any  time  after  the  30th 


VOTING  TRUSTS  203 

day  of  June,  1901,  but  not  more  than  one  hundred  schedules  per  diem 
will  be  received  by  the  undersigned. 

All  stock  trust  certificates  surrendered  for  exchange  must  be  properly 
endorsed  in  blank  by  the  registered  holder  thereof.  If  stock  certificates 
are  desired  in  any  name  other  than  that  appearing  on  the  face  of  the 
surrendered  trust  certificate,  the  endorsement  by  the  registered  holder 
must  be  acknowledged  before  a  Notary  Public,  or  be  attested  by  some 
person  or  firm  satisfactory  to  the  undersigned. 

Holders  transmitting  trust  certificates  by  mail  or  express  will  please 
indicate  whether  they  desire  the  certificates  of  stock  to  be  sent  by  mail 
or  by  express  at  their  expense. 

In  exchange  for  all  stock  trust  certificates  so  surrendered  there  will  be 
delivered  receipts  entitUng  the  party  therein  named  to  receive  stock 
certificates  of  the  character  and  amount  specified  therein  as  soon  as 
they  can  be  prepared  for  delivery. 

Continental  Trust  Co.  of  the  City  op  New  York, 

by  WiLLARD  V.  King, 
Secretary. 


THE  BALTIMORE  AND  OHIO  RAILROAD  COMPANY 

Dissolution  of  Voting  Trust 

Notice  of  Call  of  Stock  Trust  Certificates  for  Exchange  for  Stock 

Certificates 

To  the  Holders  of  Stock  Trust  Certificates  for  the  Preferred  and  Com- 
mon Stock  of  the  Baltimore  &  Ohio  Railroad  Company: 

Holders  of  stock  trust  certificates  issued  by  or  on  behalf  of  the  Voting 
Trustees  under  the  voting  trust  agreement,  dated  June  22,  1898,  entered 
into  pursuant  to  the  plan  and  agreement  of  the  same  date  for  the  re- 
organization of  the  Baltimore  &  Ohio  Railroad  Company,  are  hereby 
notified  that  in  the  exercise  of  the  power  conferred  by  said  voting  trust 
agreement,  the  undersigned  Voting  Trustees  call  upon  all  holders  of 


204  FORMS  RELATING  TO 

stock  trust  certificates  issued  under  said  voting  trust  agreement  to 
exchange  the  same  for  certificates  of  capital  stock  on  or  after  Septem- 
ber 12,  1901. 

Stock  trust  certificates  properly  endorsed  in  blank  by  the  registered 
holder  thereof  must  be  presented  for  exchange  on  or  after  said  date  to 
The  Standard  Trust  Company  of  New  York,  the  agent  of  the  Voting 
Trustees,  at  its  office,  No.  25  Broad  Street,  in  the  City  of  New  York, 
which  will  issue  in  the  first  instance  vouchers  entitling  the  holder 
therein  named  to  receive  stock  certificates  for  the  amount  therein 
specified  of  preferred  or  common  stock,  as  the  case  may  be,  as  soon  as 
the  same  can  be  prepared  for  delivery. 

Messrs.  Speyer  Brothers,  No.  7  Lothbury,  London,  will  receive 
stock  trust  certificates  in  London  for  exchange,  issuing  therefor  their 
own  receipts,  exchangeable  at  their  office  for  stock  certificates  as  soon  as 
received. 
Dated  New  York,  August  6,  1901. 

William  Salomon, 

Otto  H.  Kahn, 

Martin  Erdmann,      Voting  Trustees. 
I  Louis  Fitzgerald, 

Charles  Steele, 

BANKERS  TRUST  COMPANY 

To  the  Holders  of  Voting  Trust  Certificates  of  shares  of  capital 
stock  of  Bankers  Trust  Company,  issued  pursuant  to  Voting 
Trust  Agreement,  dated  March  9,  1912: 

The  undersigned  Voting  Trustees  have  filed  with  the  Bankers 
Trust  Company  in  accordance  with  the  provisions  of  said  agreement 
a  declaration  to  the  effect  that  said  agreement  shall  terminate  on 
October  27,  1913,  and  a  copy  of  such  declaration  is  as  follows: 

"To  the  Holders  of  Voting  Trust  Certificates  of  shares  of  stock 
of  Bankers  Trust  Company,  issued  pursuant  to  Voting  Trust  Agree- 
ment, dated  March  9th,  1912: 

"The  undersigned  Voting  Trustees  under  the  above-mentioned 


VOTING  TRUSTS  205 

agreement  do  hereby  exercise  their  discretion  in  terminating  said  agree- 
ment, and  do  hereby  declare  that  said  agreement  shall  terminate  and 
come  to  an  end  in  accordance  with  its  provisions  on  October  27th,  1913. 
Dated,  New  York,  October  17th,  1913. 

Yours  very  truly, 
Henry  P.  Davison, 
Gkorge  B.  Case, 
Daniel  G.  Reid, 

Voting  Trustees." 

In  accordance  with  the  provisions  of  said  agreement,  holders  of 
Voting  Trust  Certificates  are  hereby  required  to  deposit  as  soon  as 
possible  with  Bankers  Trust  Company,  No.  16  Wall  Street,  New 
York  City,  their  Voting  Trust  Certificates  duly  endorsed  in  blank 
or  accompanied  by  proper  blank  transfer  or  powers  of  attorney. 
On  and  after  October  27th,  1913,  Bankers  Trust  Company  will  be 
authorized  to  exchange  such  Voting  Trust  Certificates  for  temporary 
certificates  of  stock  representing  a  like  number  of  shares  called  for 
by  the  Voting  Trust  Certificates  thus  deposited.  Such  temporary 
certificates  of  stock  will  be  exchangeable  for  permanent  engraved 
certificates  on  and  after  January  15,  1914. 

Under  the  provisions  of  the  New  York  Law,  a  stock  transfer  tax 
of  two  cents  (2c)  for  each  share  of  stock  thus  transferred  must  be 
paid,  and  in  order  to  complete  such  transfer  and  exchange,  holders 
of  Voting  Trust  Certificates  are  required  to  pay  in  with  their  cer- 
tificates the  amount  of  such  tax. 

Enclosed  is  a  written  form  of  instruction  to  the  Bankers  Trust 
Company,  which  should  be  signed  and  deposited  with  the  Trust 
Company  at  the  time  of  making  such  exchange. 

On  and  after  October  27th,  1913,  no  further  transfers  of  Voting 
Trust  Certificates  will  be  made. 
Dated,  New  York,  October  17th,  1913. 

Yours  very  truly, 
Henry  P.  Davison, 
George  B.  Case, 
Daniel  G.  Reid, 

Voting  Trustees. 


206  FORMS  RELATING  TO 

THE  COLORADO  AND  SOUTHERN  RAILWAY  COMPANY 

To  Holders  of  Trust  Certificates  for  First  Preferred  Stock  and 
Common  Stock  of  the  Colorado  and  Southern  Railway  Company, 
issued  under  the  Voting  Trust  Agreement  dated  the  31st  day  of 
December,  1898,  between  Grenville  M.  Dodge,  J.  Kermedy  Tod, 
Henry  Budge,  Oliver  Ames,  Harry  Walters,  Norman  B.  Ream, 
Henry  Levis  and  Uriah  Herrmann,  a  Committee  under  a  certain 
plan  and  agreement  for  the  reorganization  of  the  Union  Pacific, 
Denver  and  Gulf  Railway  Company,  dated  September  29th,  1898, 
parties  of  the  first  part,  and  Grenville  M.  Dodge,  Frederic  P.  01- 
cott,  Harry  Walters,  Henry  Budge,  and  J.  Kennedy  Tod,  Voting 
Trustees,  parties  of  the  second  part: 

Notice  is  hereby  given  that  the  undersigned,  Voting  Trustees, 
have  in  their  discretion  decided  to  terminate  said  Voting  Trust 
Agreement  on  the  first  day  of  April,  1905,  and  that  on  said  first  day 
of  April,  1905,  they  will,  in  accordance  with  the  terms  of  said  Voting 
Trust  Agreement  and  in  exchange  for  and  upon  surrender  of  any 
stock  trust  certificates  then  outstanding,  make  delivery  of  proper 
certificates  for  the  capital  stock  of  the  Colorado  and  Southern 
Railway  Company. 

All  holders  of  stock  trust  certificates  issued  under  said  Voting 
Trust  Agreement  are  hereby  required  to  exchange  them  for  certifi- 
cates of  capital  stock  on  said  first  day  of  April,  1905. 

The  stock  trust  certificates  must  be  presented  for  exchange  to 
Messrs.  Hallgarten  &  Co.,  the  agents  of  the  Voting  Trustees  for 
such  purposes,  at  their  office.  No.  5  Nassau  Street,  in  the  City  of 
New  York. 

Dated,  New  York,  February  1,  1905. 

Grenville  M.  Dodge, 
Frederic  P.  Olcott, 
H.  Walters, 
Henry  Budge, 
J.  Kennedy  Tod, 

Voting  Trustees. 


VOTING  TRUSTS  207 

Referring  to  the  foregoing  notice,  tlie  exchange  of  stock  trust  cer- 
tificates for  stock  certificates  may  be  made  at  any  time  after  the  first 
day  of  April,  1905,  but  not  more  than  100  schedules  per  diem  will 
be  received  by  the  undersigned. 

All  stock  trust  certificates  surrendered  for  exchange  must  be 
properly  endorsed  by  the  registered  holder  thereof,  either  in  blank 
or  to  the  order  of  the  Voting  Trustees.  If  stock  trust  certificates 
are  desired  in  any  name  other  than  that  appearing  on  the  face  of 
the  surrendered  trust  certificate,  the  endorsement  by  the  registered 
holder  must  be  acknowledged  before  a  Notary  Public,  or  be  attested 
by  some  person  or  firm  satisfactory  to  the  undersigned. 

Holders  transmitting  the  trust  certificates  by  mail  or  express  will 
please  indicate  whether  they  desire  the  stock  certificates  to  be  sent 
by  mail  or  by  express  at  their  expense. 

In  exchange  for  all  stock  trust  certificates  so  surrendered,  there 
will  be  delivered  receipts  entitling  the  party  therein  named  to  re- 
ceive stock  certificates  of  the  character  and  amount  specified  therein 
as  soon  as  they  can  be  prepared  for  delivery. 

Hallgarten  &  Co. 

INTERNATIONAL  MERCANTILE  MARINE  COMPANY 

Voting  Trust  Dissolution.     Notice  and  Call. 

Holders  of  stock  trust  certificates  of  the  Voting  Trustees  under 
the  Voting  Trust  Agreement  dated  October  28,  1902,  by  and  be- 
tween International  Navigation  Company,  Ltd.,  and  J.  Pierpont 
Morgan  and  others,  as  Voting  Trustees,  which  said  agreement  was 
extended  so  as  to  expire  October  1,  1917,  are  hereby  notified  that  in 
the  exercise  of  the  discretionary  powers  vested  in  them  by  said 
Voting  Trust  Agreement,  the  Voting  Trustees  have  resolved  and 
determined  that  the  said  Voting  Trust  shall  terminate  Feljruary  23, 
1915,  and  that  on  and  after  said  date  certificates  for  preferred  stock 
and  for  common  stock  of  International  Mercantile  Marine  Company, 
shall  and  may  be  delivered  upon  surrender  of  and  in  exchange  for 
Qorresponding  stock  trust  certificates  of  the  Voting  Trustees, 


208  FORMS  RELATING  TO 

All  holders  of  stock  trust  certificates  issued  under  said  Agreement 
are  hereby  called  upon  to  exchange  the  same  for  corresponding  cer- 
tificates of  capital  stock  of  International  Mercantile  Marine  Company 
on  or  after  February  23,  1915. 

Exchanges  will  be  made  at  the  agency  of  the  Voting  Trustees, 
51  Newark  Street,  Hoboken,  New  Jersey. 

No  stock  trust  certificates  will  be  received  except  upon  payment 
of  the  amount  of  the  Federal  stock  transfer  stamp  tax  of  two  cents 
per  share. 

Dated,  Hoboken,  New  Jersey,  December  23,  1914. 

J.  Bruce  Ismay, 

PiRRIE, 

P.   A.   B.    WiDENER, 

Charles  Steele, 
Surviving  Voting  Trustees. 

December  23,  1914. 

To   the   Holders  of   Stock   Trust   Certificates   for   Preferred   and 
Common  Stock  of  International  Mercantile  Marine  Company: 

Pursuant  to  the  above  notice  and  call,  the  Voting  Trustees  will  be 
prepared,  on  and  after  February  23,  1915,  to  begin  delivery  of  cer- 
tificates of  stock  in  exchange  for  stock  trust  certificates  at  the 
Agency  of  the  Voting  Trustees  of  the  International  Mercantile 
Marine  Company,  No.  51  Newark  Street,  Hoboken,  New  Jersey. 

One  hundred  schedules  per  diem  will  be  received. 

For  all  stock  trust  certificates  surrendered  for  exchange,  together 
with  the  amount  of  the  Federal  stock  transfer  stamp  tax,  there  will 
be  delivered  vouchers  entitling  the  holder  to  receive  stock  certificates 
as  soon  as  prepared  for  delivery. 

Holders  transmitting  stock  trust  certificates  by  mail  will  please 
indicate  whether  they  wish  the  new  securities  to  be  sent  by  registered 
mail  or  by  express  at  their  expense. 

J.  P.  Morgan  &  Co., 
Agents  for  Voting  Trustees. 


VOTING  TRUSTS  209 

NATIONAL  RAILROAD  COMPANY  OF  MEXICO 

To  Holders  of  Trust  Certificates  for  Preferred  and  Common  Stock 
of  National  Railroad  Company  of  Mexico,  issued  under  the 
Voting  Trust  Agreement  dated  the  15th  day  of  March,  1902: 

Notice  is  hereby  given  of  the  dissolution  of  the  above-mentioned 
Voting  Trust  Agreement  and  that  on  the  27th  day  of  July,  1903, 
the  undersigned  Voting  Trustees  will,  in  accordance  with  the  terms 
of  said  agreement,  in  exchange  for  and  upon  the  surrender  of  any 
stock  trust  certificates  then  outstanding,  make  delivery  of  certificates 
of  stock  of  the  National  Railroad  Company  of  Mexico. 

All  holders  of  stock  trust  certificates  issued  under  said  voting 
trust  are  hereby  required  to  exchange  them  for  certificates  of  capital 
stock  on  said  27th  day  of  July,  1903. 

Stock  trust  certificates  must  be  presented  for  exchange  to  Speyer 
&  Co.,  at  their  office  in  the  City  of  New  York,  or  to  Speyer  Brothers, 
at  their  office  in  the  City  of  London,  or  to  Teixeira  de  Mattos 
Brothers,  at  their  office  in  the  City  of  Amsterdam,  the  agents  of  the 
Voting  Trustees  for  such  purposes. 
Dated,  New  York,  June  25th,  1903. 

James  Speyer, 
Jacob  H.  Schiff, 
Edgar  Speyer, 

Voting  Trustees. 

NORTHERN  COLORADO  POWER  COMPANY 

To  the  Holders  of  Voting  Trust  Certificates  Representing  Pre- 
ferred or  Common  Stock  of  the  Northern  Colorado  Power  Company: 

•  The  undersigned,  Harry  Bronner,  James  N.  Wallace  and  John  F. 
Wallace,  Voting  Trustees  under  the  agreement  dated  May  15,  1906, 
between  J.  J.  Henry,  Harry  Bronner,  George  C.  Smith  and  James 
N.  Wallace,  as  extended  by  an  agreement  dated  May  9,  1911,  be- 


210  FORMS  RELATING  TO 

tween  Norman  Hall  and  the  undersigned,  having  decided  to  ter- 
minate the  Voting  Trust  existing  by  virtue  of  said  agreements  and 
to  make  delivery  to  the  holders  of  voting  trust  certificates  outstand- 
ing under  said  agreements,  of  the  certificates  of  stock  of  The  North- 
ern Colorado  Power  Company,  preferred  and  common,  represented 
by  said  voting  trust  certificates. 

The  undersigned  have,  therefore,  pursuant  to  the  terms  of  said 
agreements  deposited  with  Central  Trust  Company  of  New  York 
certificates,  accompanied  by  proper  instruments  of  transfer  in  blank, 
of  stock  in  The  Northern  Colorado  Power  Company  to  the  respec- 
tive amounts  of  the  preferred  and  common  stock  of  said  Company 
called  for  by  the  voting  trust  certificates  outstanding  with  authority 
in  writing  to  said  Central  Trust  Company  of  New  York  to  deliver 
the  same  in  exchange  for  voting  trust  certificates  when  and  as  sur- 
rendered for  exchange,  duly  endorsed  for  transfer  in  blank. 

You  are  requested  to  surrender  your  voting  trust  certificates, 
duly  endorsed  for  transfer  or  accompanied  by  proper  instruments  of 
transfer  in  blank,  to  Central  Trust  Company  of  New  York,  on 
January  30,  1913,  or  as  soon  thereafter  as  possible  for  exchange  into 
stock  certificates. 

Holders  of  outstanding  voting  trust  certificates  issued  under  said 
voting  trust  agreement,  dated  May  15,  1906,  and  who  did  not  be- 
come parties  in  said  extension  agreement  dated  May  9,  1911,  are 
requested  to  surrender  their  voting  trust  certificates,  duly  endorsed 
in  blank  for  transfer  or  accompanied  by  proper  instruments  of 
transfer  in  blank,  to  Central  Trust  Company  of  New  York,  for 
exchange  into  stock  certificates  as  soon  as  possible. 
Dated,  New  York,  January  14,  1913. 

Harry  Bronner, 
James  N.  Wallace, 
John  F.  Wallace, 

Votinq  Trustees. 


VOTING  TRUSTS  211 

NORTHERN  PACIFIC  RAILWAY  COMPANY 

Voting  Trustees 
November  12,  1900 

The  undersigned  being  all  of  the  Voting  Trustees  named  in  and 
made  parties  to  a  certain  Agreement  made  in  the  City  of  New  York, 
December  1,  1896,  by  and  between  J.  P.  Morgan  &  Co.,  Reorganiza- 
tion Managers,  parties  of  the  first  part,  and  the  undersigned  Voting 
Trustees,  parties  of  the  second  part,  have  resolved  and  determined, 
and  hereby  do  resolve  and  determine,  that  delivery  of  stock  certif- 
icates under  the  said  Agreement,  in  exchange  for  stock  trust  certif- 
cates  issued  in  respect  thereof,  shall  be  made  before  the  first  day  of 
November,  to  wit,  whenever  on  or  after  the  second  day  of  January, 
1901,  any  such  stock  trust  certificates  may  be  received  by  the  Voting 
Trustees  for  such  exchange.  The  undersigned  further  have  resolved 
and  determined,  and  hereby  further  do  resolve  and  determine,  that 
upon  the  receipt  of  any  such  stock  trust  certificates  at  any  time  on 
or  after  the  second  day  of  January,  1901,  the  Voting  Trustees  and 
their  agents,  Messrs.  J.  P.  Morgan  and  Co.,  and  the  Deutsche  Bank 
be  and  hereby  they  are  authorized  and  directed  from  time  to  time 
to  deliver  certificates  of  stock  of  the  Northern  Pacific  Railway  Com- 
pany to  the  amount  and  of  the  character  specified  in  the  stock  trust 
certificate  so  received  by  them;  and  the  Voting  Trustees  and  their 
said  agents  are  hereby  authorized  to  do  and  to  perform  all  acts 
reasonably  necessary  or  proper  to  enable  them  to  make  such  exchange 
and  delivery;  provided  that  upon  receipt  thereof,  every  surrendered 
stock  trust  certificate  shall  be  cancelled.  Exchanges  and  deliveries 
may  be  made  at  the  rate  of  one  hundred  schedules  per  diem. 

All  stock  certificates  held  by  the  Voting  Trustees  or  their  agents, 
J.  P.  Morgan  &  Co.  or  the  Deutsche  Bank,  after  cancellation  shall 
be  delivered  by  them  to  the  Railway  Company  as  custodian  to 
hold  the  same,  for  the  protection  of  the  Voting  Trustees. 

The  undersigned  further  have  resolved  and  determined,  and  hereby 


212  FORMS  RELATING  TO 

further  do  resolve  and  determine,  that  a  Notice  and  a  Call,  sub- 
stantially in  the  form  of  that  hereunto  annexed,  shall  be  pubUshed 
in  one  or  more  newspapers  in  each  of  the  Cities  of  New  York, 
Berlin,  and  London,  once  in  each  week  for  ten  weeks  beginning  on 
or  about  the  13th  day  of  November,  1900,  and  that  a  circular  stating 
the  results  of  the  management  of  the  railway  during  the  continuance 
of  the  Voting  Trust  be  mailed  to  the  holders  of  stock  trust  certif- 
icates. 

J.  PiERPONT  Morgan, 

Georg  von  Siemens, 

Johnston  Livingston,  \  Voting  Trustees. 

August  Belmont, 

Charles  Lanier, 

NORTHERN  PACIFIC  RAILWAY  COMPANY 

Voting  Trustees 
Notice  and  Call 

Holders  of  Stock  Trust  Certificates  issued  by  or  in  behalf  of  the 
Voting  Trustees  under  the  Agreement  made  December  1,  1896, 
by  and  between  J.  P.  Morgan  &  Co.,  Reorganization  Managers, 
under  a  certain  Plan  and  Agreement  for  the  Reorganization  of  the 
Northern  Pacific  Railroad  System,  parties  of  the  first  part  and  the 
Voting  Trustees,  parties  of  the  second  part,  thereto,  are  hereby  notified 
that  in  the  exercise  of  their  discretionary  powers  reserved  and  au- 
thorized by  the  said  Voting  Trust  Agreement,  the  Voting  Trustees 
have  resolved  and  determined  that  certificates  for  the  stock  of  the 
Northern  Pacific  Railway  Company  shall  and  may  be  delivered  in 
exchange  for  and  upon  surrender  of  corresponding  stock  trust  cer- 
tificates before  the  first  day  of  November,  1901,  to  wit  at  any  time 
on  or  after  the  2d  day  of  January,  1901. 

All  holders  of  the  Stock  Trust  Certificates  issued  under  said 
Agreement  are  hereby  called  upon  to  exchange  the  same  for  corre- 
sponding certificates  of  capital  stock  of  the  Northern  Pacific  Rail- 
way Company  at  any  time  on  or  after  the  2d  day  of  January,  190L 


VOTING  TRUSTS  213 

All  Stock  Trust  Certificates  surrendered  for  exchange  must  be 
properly  endorsed  in  blank  by  the  registered  holder  thereof. 

Stock  Trust  Certificates  issued  in  New  York  must  be  presented 
for  exchange  to  J.  P.  Morgan  &  Co.,  agents  of  the  Voting  Trustees 
in  New  York.  Stock  Trust  Certificates  issued  in  Berlin  must  be 
presented  for  exchange  to  the  Deutsche  Bank,  agents  of  the  Voting 
Trustees  in  Berlin.  Such  exchanges  may  be  made  on  or  after  the 
second  day  of  January,  1901 ;  but  not  more  than  one  hundred  sched- 
ules per  diem  will  be  received  by  the  Agents  in  either  city. 

In  exchange  for  all  Stock  Trust  Certificates  so  surrendered,  there 
will  be  deUvered  vouchers  entitling  the  party  therein  named  to  receive 
stock  certificates  of  the  character  and  amount  therein  specified  as 
soon  as  the  same  can  be  prepared  for  delivery. 

J.  PiERPONT  Morgan, 

Georg  von  Siemens, 

Johnston  Livingston,   ■  Voting  Trustees. 

August  Belmont, 

Charles  Lanier, 


COLORADO  MIDLAND  RAILWAY  COMPANY 

Stock  Trust  Certificates 

Notice  is  hereby  given  that  the  Voting  Trustees,  with  the  written 
consent  of  the  holders  of  a  majority  in  interest  of  the  outstanding 
Stock  Trust  Certificates,  have  sold  all  of  the  stock  of  the  Colorado 
Midland  Railway  Company  represented  by  said  certificates,  and 
that  holders  of  certificates  will  be  paid  therefor  at  the  rate  of  $30 
per  share  for  Preferred  Stock  and  $12.50  per  share  for  Common 
Stock  at  the  office  of  the  Central  Trust  Company,  54  Wall  Street, 
.New  York,  after  July  2,  1900,  upon  surrender  of  their  certificates 
duly  endorsed  in  blank. 
New  York,  July  2,  1900. 

Frederic  P.  Olcott, 
Chairman,  Voting  Trustees. 


214  FORMS  RELATING  TO 

LONG  ISLAND  RAILROAD  COMPANY 

To  the  Holders  of  Voting  Trust  Certificates  of  Stock  of  the  Long  Island 
Railroad  Co.,  issued  by  the  United  States  Mortgage  &  Trust  Co., 
Agent,  under  the  Agreement  of  February  1st,  1897: 

You  are  hereby  notified  that  an  agreement  has  been  made  for  the 
sale  of  the  majority  of  the  capital  stock  of  the  Long  Island  Railroad 
Company  represented  by  the  Voting  Trust  Certificates  issued  under 
the  agreement  of  February  1st,  1897.  On  application  at  the  office  of 
the  United  States  Mortgage  and  Trust  Company,  prior  to  June  1st, 
1900,  full  particulars  will  be  given  to  any  certificate-holder.  It  is 
important  that  every  holder  who  desires  to  avail  himself  of  this  oppor- 
tunity to  dispose  of  his  interest  should  communicate  in  person  with  the 
undersigned  within  the  time  mentioned. 

United  States  Mortgage  &  Trust  Co., 

Agent. 
by  George  W.  Young, 
President. 

New  York,  May  14,  1900, 
The  Transfer  Books  of  the  Voting  Trustees  for  Voting  Trust  Cer- 
tificates representing  shares  of  stock  of  the  Long  Island  Railroad  Com- 
pany will  be  closed  at  3:00  p.  m.  on  June  1st,  1900,  and  will  remain 
closed  until  further  notice. 

United  States  Mortgage  &  Trust  Co., 
Agent  for  the  Voting  Trustees. 
by  George  W,  Young, 
President. 

ST.  LOUIS,  IRON  MOUNTAIN  AND  SOUTHERN  RAILWAY 

COMPANY 

In  Pursuance  of  the  Areement,  dated  November  27,  1878  under 
which  nearly  all  the  shares  of  stock  of  the  St.  Louis,  Iron  Mountain 


VOTING  TRUSTS  215 

&  Southern  Railway  Company  have  been  transferred  to  us,  as 
trustees  of  the  stock  Trust  therein  mentioned,  notice  is  hereby  given 
to  all  to  whom  it  may  concern,  that  the  said  railway  company  has 
notified  us  that  it  claims  that  the  time  has  arrived,  when,  according 
to  the  provisions  of  said  agreement,  the  said  stock  trust  is  to  ter- 
minate, and  that  in  our  opinion  it  is  so,  and  that  we  intend  to  take 
action  accordingly  by  transferring  the  said  shares  of  stock  to  the 
Farmers'  Loan  and  Trust  Company  for  distribution,  after  the  pub- 
lication of  this  notice,  for  the  time  and  in  the  manner  prescribed  by 
the  said  agreement  in  that  behalf. — Dated  New  York,  March  13, 
1880. 


Trustees 


Robert  Lenox  Kennedy, 
Samuel  G.  Ward, 
Thomas  Allen, 
Nelson  M.  Beckwith, 
Charles  H.  Marshall. 


INDEX 


Adams,  Edward  D.,  80 
Agent  of  trustees,  85 
Agreement  for  office,  120 
Alabama  Consolidated  Coal  and 

Iron  Co.,  79,  80 
Albany  and  Susquehanna  R.  R. 

Co.,  35 
Allen,  Thomas,  215 
Allis-Chalmers       Manufacturing 

Co.,  16,  37,  38,  40,  50,  77,  93 
Alsberg,  Siegmund,  202 
American  Bicycle  Co.,  47 
American  Gas  and  Electric  Co.,  40 
American  Power  and  Light  Co., 

40 
American  Surety  Co.,  66 
American   Telephone   and   Tele- 
graph Co.,  29 
Ames,  Oliver,  206 
Anthony  and  Scovill  Co.,  74,  76, 

88,  136 
Argus  Co.,  28 
Atchison,  Topeka  and  Santa  Fe 

R.  R.  Co.,  6,  25,  42,  58,  69,  91 
Atlantic  and  Great  Western,  8,  83 
Atlantic  and  Pacific  R.  R.  Co.,  5, 

21,  42,  69,  91 

B 

Bache  v.  Central  Leather  Co.,  30, 

108,  114 
Baker,  George  F.,  10,  45, 139, 148, 

179,  188,  190,  191 


Baldwin,  Simeon  E.,  19,  34 
Baltimore  and  Ohio  R.  R.  Co.,  3, 

40,  41,  75,  81,  82,  88,  91,  93, 
160,  203 

Baltimore,   Chesapeake  and  At- 
lantic Ry.  Co.,  76 
Bank  of  Los  Banos  v.  Jordan,  35 
Bankers  Life  Insurance  Co.,  22 
Bankers  Trust  Co.,   18,  24,  38, 

41,  53,  70,  81,  89,  90,  93,  204 
Baring  Brothers  and  Co.,  4 
Barnes  v.  Brown,  28 

Bath  Portland  Cement  Co.,  44,  92 
Bay  State  Co.,  67 
Beckwith,  Nelson  M.,  215 
Behnont,    August,    57,    80,    170, 

173,  175,  176,  182,  212,  213 
Belmont  &  Co.,  173,  175,  176, 182 
Bennett,  Walter  H.,  136 
Benvind,   Edward  J.,    170,    173, 

175,  176,  182 
Bethlehem  Steel  Co.,  16 
Bischoff,  Henry,  110 
Blair,  James  A.,  202 
Blatchford,  Samuel,  104 
BUss,  George,  12,  191 
Bonbright  v.  State,  133 
Booth  Fisheries  Co.,  21 
Boston  and  Maine  R.  R.  Co.,  11 
Boston  Railroad  Holding  Co.,  11 
Boston  United  Gas  Co.,  67 
Bowditch  V.  Jackson  Co.,  101 
Boyer  v.  Nesbitt,  103 
Brady,  Anthony  N.,  151, 153, 154, 

155,  159 


217 


218 


INDEX 


Bridgers  v.  First  National  Bank, 

102,  106 
Bridgers  v.  Staton,  120 
Brightman  v.  Bates,  101 
Bronner,  Harry,  209,  210 
Brown,  John  Crosby,  12,  191 
Brown  Brothers  &  Co.,  6,  82 
Brown  v.  Pacific  Mail  S.  S.  Co.,  6, 

104 
Budge,  Henry,  206 
Byington  v.  Piazza,  66 


California  Petroleum  Co.,  92,  93, 

94,  161 
Canfield,  C.  A.,  162 
Capitalization,    change    in,     14, 

45-51,  158 
Carnegie  Trust  Co.  v.  Security 

Life  Ins.  Co.,  104,  129,  130 
Case,  George  B.,  205 
Case  (J.  I.)  Threshing  Machine 

Co.,  94 
Central  American  Growers  Co.,  21 
Central  Fuel  Oil  Co.,  41 
Central  Iron  and  Steel  Co.,  43 
Central  Leather  Co.,  30,  108,  114 
Central  New  England  Ry.  Co., 

17,20 
Central   R.   R.   of  New  Jersey, 

200,  201 
Central  Trust  Co.,   42,   48,   66, 

116,    117,    152-155,    167,    169, 

194,  195,  198,  210,  213 
Certificate  of  incorporation,  59, 

60,  61,  127,  128 
Certificates,  forms  of,  160 
Chapman  v.  Bates,  102,  132 
Cheney,  Benjamin  P.,  202 
Chesapeake  and  Ohio  Ry.  Co.,  3, 

12,  24,  190 


Chicago,  Alton  and  St.  Louis,  6 
Chicago  and  Atlantic  Ry.  Co.,  8, 9 
Chicago    City    and    Connecting 

Kys.,  21,  90,  97 
Chicago  City  Ry.  Co.,  21,  34,  91 
Chicago  Great  Western  R.  R.  Co., 

4,  24,  38,  40,  50,  53,  69,  78,  82, 

89,  90,  93,  138,  191 
Chicago  Southern  Ry.  Co.,  21,  74, 

88 
Chicago  Railways  Co.,  15,  21,  64 
Choice  of  voting  trustees,  78 
Cincirmati,  Hamilton  and  Day- 
ton R.  R.  Co.,  9,  100,  121,  163 
Cincinnati,  Hamilton  and  Dayton 

Ry.  Co.,  75 
Clarke  v.  Central  R.  R.  &  B.  Co., 

123 
Collateral  trust  agreement,  95 
Colorado  and  Southern  Ry.  Co., 

17,  50,  53,  90,  206 
Colorado  Midland  Ry.  Co.,  58, 

69,  74,  213 
Colorado,  Wyoming  and  Eastern 

Ry.   Co.,   63 
Columbia    Trust    Co.,    92,    154, 

155 
Columbia-Knickerbocker      Trust 

Co.,  162 
Commonwealth  v.  Bringhurst,  29 
Commonwealth    v.    Roydhouse, 

88,  125 
Commonwealth  v.  Union  Trac- 
tion Co.,  133 
Compensation  of  trustees,  38,  144 
Cone  V.  Russell,  105, 119 
Connecticut  Co.,  10 
Consents  by  certificate  holders, 

45-51,  84 
Consideration  supporting  voting 

trust,  126,  127 


INDEX 


219 


Consumers'  Gas  Trust  Co.,  21, 

59,  60,  128 
Consumers'    Gas    Trust    Co.    v. 

Quinby,  60 
Continental  Trust  Co.,  202,  203 
Cook,  W.  W.,  29 
Corbin,  Austin,  80 
Corporation    as    voting    trustee, 

85,  88,  92 
Coster,  Charles  H.,  161,  179,  188 
Crane,  George  F.,  167,   168 
Criticisms  of  voting  trusts,    19, 

21,  22,  23,  28,  31,  33,  130 
Custody  of  stock  certificates,  91 
Cuyahoga  Telephone  Co.,  53 

D 

Davison,  Henry  P.,  205 
Deere  &  Co.,  21 
Deering,   Charles,   82 
DeUvery  of  stock,  2,  77 
Denver  and  Salt  Lake  R.  R.  Co., 

40 
Denver,  Northwestern  and  Pacific 

Ry.  Co.,  79,  87,  90 
Denver  Railway  Securities  Co.,  21 
Deposit  agreements,  2 
Depositary,  85,  91,  93 
Detroit  Southern  Ry.  Co.,  95 
Deutsche  Bank,  81,  211,  213 
Deutsche  Treuhand-Gesellschaft, 

117 
Directors,  election  of,  14,  41,  86 
Directors,  nomination  of,  42,  43 
Discretionary  power  of  trustees, 

132 
Discretionary     termination,     10, 

14,  52  et  seq.,  203 
Dissolution  of  trust,  see  termina- 

tion 


Distillers  Securities  Corporation, 

128 
Dividends,  2,  36,  37,  137,  156 
Dodge,  Grenville  M.,  206 
Doheny,  E.  L.,  162 
Drexel  and  Co.,  199 
Drexel,  Morgan  and  Co.,  191 
"Dry"  trust,  106,  125,  126 
Dubuque  and  Sioux  City  R.  R. 

Co.,  76 
Dunning,  William  F.,  62 
Durant,    William   C,    151,    153, 

154,  155,  159 
Duration  of  voting  trusts,  20,  21, 

105,   106,   122,   123,   137,   142, 

150,    156,    168 

E 

Eastman,  Samuel  C,  202 

Edenborn,  William,  193 

Elger  V.  Boyle,  110 

EUis  Granite  Co.,  92 

Equitable  Life  Assurance  So- 
ciety, 81,  148 

Erdmann,  Martin,  204 

Erie  R.  R.  Co.,  3,  7,  8,  9,  24,  38, 
40,  41,  57,  58,  79,  81,  85,  88, 
90,  93,  196 

European  and  Northern  Ameri- 
can Ry.  Co.,  5 

Events  of  Termination,  7,  8,  9, 
17,  52  et  seq.,  142,  156,  180, 196, 
198,  202 

Exclusive  voting  trust,  128, 
129 

Expenses  of  trustees,  38,  39 

Extension  agreement,  forms  of, 
170 

Extension  of  trust,  10,  70,  93, 
170 


220 


INDEX 


Farmers'  Loan  and  Trust  Co.,  6, 

165,  215 
Farmers'  Loan  and  Trust  Co.  v. 

Chicago  and  Atlantic  Ry.  Co., 

9 
Faulds  V.Yates,  103 
Fennessy  v.  Ross,   120 
Finance  and  Holding  Corporation, 

71 
First  National  Bank  of  New  York, 

64,85 
First  National  Bank  of  Tarboro, 

21 
First  Security  Co.,  44,  64,  85 
First  Trust  and  Savings  Bank, 

192,  193 
Fisher  v.  Bush,  108,  121 
Fisheries  Co.,  66 
Fisk,  Pliny,  80 
Fitzgerald,   Louis,    9,    161,    193, 

194,   197,  202,  204 
Fleming,   Robert,   139,   148,   191 
Florida  East  Coast  Ry.  Co.,  97 
Foreclosure,  12, 13 
Fowler,  Thomas  P.,  62 
Freedman,    Andrew,    170,     173, 

175,  176,  182 

G 

Gage  V.  Fisher,  121 
Gardiner,  George  H.,  139 
Gardner,  Rathbone,   10 
Gates,  John  W.,  193,  194 
General   Asphalt   Co.,   52 
General  Motors  Co.,  81,  89,  93, 

151 
Genesee  Valley  Canal  R.  R.  Co., 

121 
Gleed,  Charles  S.,  202 


Gould,  George  J.,  194 

Gray  v.  Bloomington  and  Normal 

Ry.  Co.,  132 
Grenfell,  Cecil  A.,  80 
Griffith  V.  Jewett,  9,  105 
Guaranty  Trust  Co.,  19,  24,  37, 

40,  53,  71,  77,  96,  173,  175,  176 
Guernsey  v.  Cook,  120 
Guggenheim,  Solomon  R.,  182 

H 

Hafer  v.  New  York,  Lake  Erie 
and  Western  Ry.  Co.,  9,  110, 
121 

Haines  v.  Kinderhook  and  Hud- 
son Ry.  Co.,  133 

Hall  V.  Merrill  Trust  Co.,  76 

Hall,  Norman,  210 

Hallgarten   &  Co.,   207 

Hamlin,   Hannibal,   5 

Harriman,  Edward  H.,   194 

Harrity,  William  F.,  193 

Harvey  v.  Linville  Improvement 
Co.,  29,  104,  105 

Hawley,  Edwin,  182 

Hayford,  WiUiam  B.,  5 

Hecksher,  August,  193 

Hemphill,  Alexander  J.,  80 

Henry,  G.  G.,  162 

Herrmann,  Uriah,  206 

H-0  Co.,  92 

Hohnes,  Oliver  Wendell,  101,  106 

Hoyt,  Colgate,  168 

Hoyt,  Gerald  L.,  182 

Hubbard,  Thomas  H.,  195,   196 

Hudson  and  Manhattan  Ry.  Co., 
42,  133 


Increase  of  stock,  40,  46 
Indefiniteness  of  duration,  123 


INDEX  221 

Indefiniteness  of  terms,  105  Kidder,  Peabody  and  Co.,  25,  26 

Indian  Refining  Co.,  79,  90,  91  Kinderhook  and  Hudson  Ry.  Co., 

Instructions  to  trustees,  42,  43,  78 

44,  104  Knickerbocker    Investment    Co. 

Interborough-Metropolitan     Co.,  v.  Voorhees,  22 

70,  71,  77,  82,  89,  93,  94,  170,  Knowlton,  Marcus  P.,  11 

181  Kreissel  v.  Distilling  Co.,  129 

International    Agricultural    Cor-  Kuhn,  Loeb  and  Co.,  67,  160 

poration,  38,  40,  52 

International   Fire   Engine   Co.,  j 

15,  78 

International  Harvester  Co.,   8,  Lake  Street  Elevated  Ry.  Co.,  69 

40,  52,  82,  89,  93,  163,  192  Lambert,  John,  193 

International  Mercantile  Marine  Lane,  William  C,  164 

Co.,  4,  15,  50,  53,  70,  72,  76,  90,  Lanier,  Charles,  10,  57,  179,  188, 

95,  183,  207  190,    212,    213 

International     Navigation     Co.,  Laramie,  Hahn's  Peak  and  Pacific 

Ltd.,  207  Ry.  Co.,  63 

International  Nickel  Co.,  44,  79  Lawyers    Surety    Co.,    66 

Interstate  Telephone  Co.,  78  Ledyard,  Lewis  Cass,  148,  151 

Irvin,  Richard,  Jr.,  62  Lehigh  Coal  and  Navigation  Co., 

Ismay,  J.  Bruce,  184,  208  15,  74,  92 

Ives,  Brayton,  80  Levis,  Henry,  206 

Limitations  on  power  of  trustees, 

J  14,  43,  44,  45 

Jackson  Co    75    101  Linville  Improvement  Co.,  88 

Jewett,  Hugh  J.,'  8,  9,  163  Livingston,    Jolmston,    57,    212, 

London  and  County  Banking  Co. 
V.    London    and    River    Plate 

Kahn,  Otto  H.,  194,  204  Bank,  115 

Kansas  City  and  Memphis  Ry.  Long  Island  R.  R.  Co.,  76,  92, 

Co.,  79  214 

Kansas  City,  Pittsburg  and  Gulf  Loose-Wiles  Biscuit  Co.,  69,  92, 

R.  R.  Co.,  193  93,  94 

Kansas  City  Southern  Ry.  Co.,  Louisiana   and   Arkansas   R.   R. 

15,  76,  79,  95,  193  Co.,  92 

Kansas  Pacific  Ry.  Co.,  6  Louisville  Home  Telephone  Co., 

Katzler  v.  Bensinger,  120  88 

Kennedy,  Robert  Lenox,  5,  215  Louisville,  St.  Louis  and  Texas, 

Keystone   Telephone   Co.,    70  74,  83 


222 


INDEX 


M 

Maine  Central  R.  R.  Co.,  5 
Marquand,  Henry  G.,  4 
Marshall,  Charles  H.,  215 
Maryland,   Statutes  of,   40,   94, 

117,  118 
Massachusetts     Electric     Com- 
panies, 97 
Matter  of  Argus  Co.,  28 
Maxwell  Motor  Co.,  37,  50,  86, 

93 
McCall  Ferry  Power  Co.,  79 
McCormick,  Cyrus  H.,  82,  193 
McCrum-Howell  Co.,  50,  79 
Meetings  of    certificate    holders, 

46,  48,  84 
Meetings  of  trustees,  86 
Melville,  Henry  H.,  80 
Mercantile  Trust  Co.,  160,  161, 

194 
Merrill,    Edwin   G.,   80 
Merrill  Trust  Co.,  76 
Metropolitan  West  Side  Elevated 

R.  R.  Co.,  52,  92,  194 
Michigan  State  Telephone  Co., 

53,  92,  93 
Midland  R.  R.  of  New  Jersey,  7 
Midland  Valley  R.  R.  Co.,  54 
Milliken  Bros.,  Inc.,  75 
Minority    stockholders,    13,    19, 

31,  37 
Missouri,  Kansas  and  Texas  Ry. 

Co.,  78 
Mobile  and  Chicago  R.  R.  Co., 

78 
Mobile  &  Ohio  R.  R.  Co.,  6,  43, 

103,  165 
Mobile  and  Ohio  R.  R.  Co.  v. 

Nicholas,   7,   43,    103 
Moore,  John  G.,  67 


Morel  V.  Hoge,  123 

Morgan,  J.  Pierpont,  9,  12,  45, 
56,  57,  80,  139,  148,  151,  179, 
184,  188,  190,  191,  197,  201, 
207,  212,  213 

Morgan,  J.  P.  &  Co.,  54,  56,  75, 
79,  80,  138,  141,  148,  184,  186, 
188, 192, 197, 198,  208,  211-213 

Morgan,  J.  S.  &  Co.,  79 

Mortgages,  consent  for,  14, 45-51, 
146,  168 

Moses  V.  Scott,  122,  125 

Mutual  Union  Telegraph  Co.,  7 

N 

National  Asphalt  Co.,  21,  54 

National  R.  R.  Co.  of  Mexico, 
17,  53,  209 

New  England  Navigation  Co., 
10,  11 

New  Hampshire  Electric  Rail- 
ways, 97 

New  Orleans  Terminal  Co.,  96, 
165,   166 

New  York  and  New  England 
R.  R.  Co.,  27 

New  York,  Lake  Erie  and  West- 
em  R.  R.  Co.,  7,  61,  127 

New  York,  New  Haven  and  Hart- 
ford R.  R.  Co.,  10,  11,  30,  63 

New  York,  Ontario  and  Western 
Ry.  Co.,  21,  62,  63 

New  York,  Pennsylvania  and 
Ohio  R.  R.  Co.,  8,  95 

New  York  Stock  Exchange,  59, 
72,  195 

New  York,  Statutes  of,  20,  21, 
40,  62,  94,  113,  117,  118 

Northern  Colorado  Power  Co., 
53,  209 


INDEX 


223 


Northern  Pacific  R.  R.  Co.,  38,  96 
Northern  Pacific  Ry.  Co.,  3,  16, 

24,  37,  41,  47,  53-56,  76,  78,  80, 

81,  88,  90,  93,  211 
Northampton   Portland   Cement 

Co.,  In  re,  133 
Northwestern    Elevated    R.    R. 

Co.,  17,  92 
Notice  of  termination,  forms  of, 

190 
Noyes,  Walter  C,  10 
Number  of  trustees,  88 

O 

Objects  of  voting  trusts,  14,  15 
O'Brien,  Morgan  J.,  148,  151 
O'Grady  v.  U.  S.  Indep.  Tel.  Co., 

74 
Olcott,  Frederic  P.,  168,  195,  201, 

206,  213 
Old  Colony  Trust  Co.,  116 
Omaha  Water  Co.,  17,  21,  39,  58 
Oregon  Railroad  and  Navigation 

Co.,  44,  66,  85,  88,  92,  93, 116 
Oregon  Short  Line  R.  R.  Co.,  67 
Owen,  Robert  L.,  24 


Pacific  Mail  Steamship  Co.,  6,  76 
Packard,  C.  S.  W.,  201 
Pam,  Max,  193 

Parkes  Manufacturing  Co.,  22 
Parties  to  trust  agreement,  93 
Pennsylvania  Co.  for  Insurances, 

etc.,  199 
Pennsylvania  R.  R.  Co.,  6,  29 
People  V.  Albany  &  Susquehanna 

R.  R.  Co.,  35 
People  V.  Koenig,  112 


People's  Water  Co.,  42,  92 
Perkins,  George  W.,  82,  148,  151, 

193 
Perpetual  trust,  6,  21,  59,  123 
Personnel  of  trustees,  78 
Pettit,  Silas  W.,  193 
Philadelphia  and  Reading  R.  R. 

Co.,  16,  42,  46,  80,  87,  91,  100, 

126 
Philadelphia  and   Reading   Coal 

and  Iron  Co.,  46,  201 
Philadelphia  Rapid  Transit  Co., 

38,  93,  126 
Philadelphia  Steel  Co.,  201 
Pirrie,  W.  J.,   184,  208 
Pitney,   Mahlon,   23,   106 
Pittsburg  and  Lake  Erie  R.  R. 

Co.,  6,  59,  100,  123,  167 
Pittsburg  and  Western  Ry.  Co., 

53 
Pittsburgh  Coal  Co.,  26 
Plaintiff,  qualification  of,  134 
Plant,  Morton  F.,  182 
Pledge,  power  to,  88,  104 
Pledge,   trust  certificates  under, 

133 
Pooling  agreements,  2 
Poor,  Ruel  W.,  136 
Pope,  Albert  A.,  167,  168 
Pope  Manufacturing  Co.,  47,  48, 

95,   167,  168 
Powell,  Thomas  W.,  61 
Powers,  general,  of  voting  trus- 
tees, 2,  14 
Providence   and    Danielson    Ry. 

Co.,  11 
Proxy  by  voting  trustees,  88 
Proxy  committee,  22,  30,  32 
Proxy,     compared    with    voting 

trust,  33,  124 
Public  policy,  33,  101,  113 


224 


INDEX 


Public    Service    Commission    of 

N.  Y.,  63 
Pujo,  Arsene  P.,  23,  24,  64 
Pure  Oil  Co.,  64,  88,  93 
Purpose  of  voting  trusts,  16,  18, 

20 

Q 

Quaker  Oats  Co.,  21,  69,  83 
Qualifications  of  voting  trustees, 

85 
Qualifying  shares,  89 


R 


Railway  Co.  v.  State,  106 
Read,  William  A.,  168,  195 
Reading  Belt  R.  R.  Co.,  200 
Reading  Co.,  24,  41,  46,  57,  58, 

77,  81,  88,  90>  93,  198 
Reading  Iron  Co.,  201 
Readjustment  agreements,  2 
Ream,  Norman  B.,  206 
Registrar,  85,  93 
Reid,  Daniel  G.,  205 
Reorganizations,  1,  13,  15 
Reorganization  agreements,  2 
Reorganization    committees,    13, 

39,98 
Reorganization  managers,  13,  53, 

54, 
Resignation  of  trustees,  81,  144, 

150,  157,  176 
Restraint  on  alienation,  33,  53, 

122 
Restraint  on  competition,  123 
Restraint  on  trade,  121 
Results  of  voting  trusts,  98 
Revocable  power,  124 


Rhode  Island  Co.,  10 
Richmond   and   Danville   R.   R. 

Co.,  128 
Richmond  and  West  Point  T.  R. 

&  W.  Co.,  188 
Richmond  Radiator  Corporation, 

40,  78,  90 
Rogers,  Henry  H.,  67 
Rules  of  procedure,  85,  144,  157, 

177 

S 

Sale,  power  of,  11,  52,  74,  138 
Salomon,  William,  161,  204 
Schiff,  Jacob  H.,  209 
Seaboard  Air  Line  Ry.  Co.,  3, 

22,  23,  41,  69,  71,  95 
Sea  View  R.  R.  Co.,  11 
Secret  profits,  123 
Security  Life  and  Annuity  Co.,  38 
Sehgman,  Isaac  N.,  202 
Seward,  Clarence  A.,  31 
Shelmerdine  v.  Welsh,  87,  126 
Shepaug  Voting  Trust  cases,  100, 

123 
Sheppard  v.  Rockingham  Power 

Co.,  105,  110 
Sherman,  George,  179,  188 
Shipley,  Samuel  R.,  193 
Shonts,  Theodore  P.,   170,   173, 

175,   176,    182 
Sielcken,   Hermann,    193,    194 
Siemens,  Georg  von,  57,  80,  81, 

212,  213 
Smith  V.  S.  F.  and  N.  P.  Ry.  Co., 

104,  132 
Smith,  George  C,  209 
Smith,  Winthrop,  193 
Smithers,  F.  S.,  167,  168 
Snow  V.  Church,  120 
South  Carolina  R.  R.  Co.,  43 


INDEX 


225 


Southern  Indiana  Ry.  Co.,  74 
Southern  Iron  and  Steel  Co.,  49, 

79,  80 
Southern  Ry.  Co.,  4,  7,  10,  24, 

26,  41,  45,  53,  57,  58,  67,  68,  70, 

76,  81,  88,  90,  93,  96,  128,  166, 

179,  184,  188 
Speyer,  Edgar,  209 
Speyer,  James,  209 
Speyer   Bros.,    160,    203,    209 
Speyer  &  Co.,  160,  161,  209 
St.  Louis  and  San  Francisco  R.  R. 

Co.,  6,  16,  17,  42,  57,  69,  91,  96, 

97,  166,  201 
St.  Louis,  Arkansas  and  Texas,  22 
St.    Louis,    Iron   Mountain   and 

Southern  Ry.  Co.,  4,  5,  69,  214 
St.  Louis,  Kansas  City  and  North- 
em  R.  R.  Co.,  6,  59 
St.  Louis,  Rocky  Mountain  and 

Pacific  Ry.  Co.,  69,  75 
Standard  Oil  Co.,  7,  38,  65,  84, 

88,  97,   121,  169 
Standard  Oil  Co.  v.  United  States, 

66 
Standard  Trust  Co.,  96,  166,  192, 

203 
State  V.  Standard  Oil  Co.,  65 
Staten  Island  Electric  R.  R.  Co., 

75 
Statutes,  20,  21,  40,  62,  94,  113, 

117,  118,  128 
Statutory  voting  trust,  62 
Steele,  Charles,  184,  204,  208 
Stevens,  F.  W.,  139 
Stewart,  John  A.,  5,  202 
Stillman,    James,    193,    194 
Storrow,  James  J.,  151,  153,  154, 

155,   159 
Strauss,  Frederick,  151,  153,  154, 

155,  159 


Subscription  rights,  40 
Successor   trustees,  81,   176;   see 

Vacancies 
Sullivan  v.   Parkes,   22 
Sullivan  v.  Williams,  122 
Swayze,  Francis  J.,  110,  126 
Swinyard,    Thomas,    62 


Tennant,  Charies,  9,  197 
Termination  of  trust,  5,  7,  10,  14, 

17,  24,  52  et  seq. 
Termination,   notices  of,    190  et 

seq. 
Testamentary  trusts,  97,  110,  111 
Texas  and  Pacific  Ry,  Co.,  7,  69 
Thomas,  Anthony,  J.,   179,   188 
Thompson-Starrett   Co.   v.   Ellis 

Granite  Co.,  102 
Title  to  trust  stock,  36,  88 
Tod,  J.  Kennedy,  161,  202,  206 
Toledo  Railways  and  Light  Co., 

81 
Toledo,    St.   Louis   and   Kansas 

City  R.  R.  Co.,  75,  195 
Toledo,  St.  Louis  and  Western 

R.  R.  Co.,  52,  75,  195 
Transfer  agent,  85,  93 
Transfer  tax,  133 
Transfer  of  control,  95 
Transferability  of  trust  receipts, 

41 
Trust  company  as  voting  trustee, 

2 
Tunis  v.  Hestonville,  etc.,  R.  R. 

Co.,  Ill 

U 

Underwood,  F.  D.,  58 
Union  Pacific,  Denver  and  Gulf 
Ry.  Co.,  58,  80 


226 


INDEX 


Union  Terminal  Association,  74 
Union  Trust  Co.  v.  Oberg,  133 
United  Button  Co.,  79,  88 
United  Cigar  Manufacturers  Co., 

20,  92 
United  Coal  Co.,  79 
United  Railways  Co.  of  St.  Louis, 

52,  82,  87 
United  States  Independent  Tele- 
phone Co.,  74 
United  States  Leather  Co.,  50 
United     States     Mortgage     and 

Trust   Co.,    162,   214 
United  States  Motor  Co.,  50 
United   States  Radiator  Co.   v. 

State,  133 
United  States  Shipbuilding  Co., 

16 
United  States  Pipe  Line  Co.,  85 
United    Water    Works    Co.    v. 

Omaha  Water  Co.,   59 
Untermyer,  Samuel,  24,  46 


Vacancies  among  trustees,  79,  81, 

144,  150,  157,  176 
Vanderbilt,  Cornelius,  6 
Vanderbilt,    Cornelius,   Jr.,    170, 

173,   175,   176,   182 
Vanderbilt  v.  Bennett,  6, 123 
Venner  v.  Chicago  City  Ry.  Co., 

21,  34,  91 
Virginia,  Statutes  of,  128 
Virginia    Iron,    Coal    and    Coke 

Co.,  70,  74 
Voting  power,  denial  of,  112 
Voting  trust  agreements,   forms 

of,  136  et  seq. 
Voting   trust   certificates,    forms 

of,  140,  153,  160  et  seq.,  172 


W 

Wallace,  James  N.,  151,  153,  151, 
155,  159,  209,  210 

Wallace,  John  F.,  209,  210 

Walters,  Harry,  206 

Wanamaker,  John,  80 

Ward,  Samuel  G.,  215 

Warren  v.  Pim,  21,  23,  29,  102, 
105,  108,  110,  124,  126 

Watkin,   Edward   W.,   61 

Weber  v.  Delia  Mountain  Min- 
ing Co.,  103 

Welsh,  John  Lowber,  80 

Werk,  Casimir  L.,  163 

West  V.  Guaranty  Trust  Co.,  97 

Western  New  York  and  Penn- 
sylvania Ry.  Co.,  86 

Westlake,  John,  61 

Whalen,  Charles  S.,  62 

White  V.  Thomas  Inflatable  Tire 
Co.,  128,  130 

Whitney  Co.,  79 

Whitridge,  Frederick  W.,  67 

Widener,  P.  A.  B.,  184,  208 

Willard,  Daniel,  75 

Williams  v.  Montgomery,  122 

Wilmington  and  Northern  R.  R. 
Co.,  200 

Winslow,  A.  S.,   163 

Winsor  v.  Commonwealth  Coal 
Co.,  104 

Wisconsin  Central  System,  53, 
78,  83,  91,  95,  123 

Withdrawal  of  stock,  72 

Wolff,  Abraham,  161 

Woodruff  V.  Dubuque  &  Sif^ux 
City  R.  R.  Co.,  31,  125 

Worth  V.  Knickerbocker  Trust 
Co.,  105 


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